Correlation Between Enphase Energy and Meta Materials
Can any of the company-specific risk be diversified away by investing in both Enphase Energy and Meta Materials at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Enphase Energy and Meta Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enphase Energy and Meta Materials, you can compare the effects of market volatilities on Enphase Energy and Meta Materials and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Enphase Energy with a short position of Meta Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enphase Energy and Meta Materials.
Diversification Opportunities for Enphase Energy and Meta Materials
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Enphase and Meta is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Enphase Energy and Meta Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Materials and Enphase Energy is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Enphase Energy are associated (or correlated) with Meta Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Materials has no effect on the direction of Enphase Energy i.e., Enphase Energy and Meta Materials go up and down completely randomly.
Pair Corralation between Enphase Energy and Meta Materials
Given the investment horizon of 90 days Enphase Energy is expected to under-perform the Meta Materials. But the stock apears to be less risky and, when comparing its historical volatility, Enphase Energy is 11.95 times less risky than Meta Materials. The stock trades about -0.11 of its potential returns per unit of risk. The Meta Materials is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 7.00 in Meta Materials on August 28, 2024 and sell it today you would lose (0.90) from holding Meta Materials or give up 12.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enphase Energy vs. Meta Materials
Performance |
| Timeline |
| Enphase Energy |
| Meta Materials |
Enphase Energy and Meta Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enphase Energy and Meta Materials
The main advantage of trading using opposite Enphase Energy and Meta Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enphase Energy position performs unexpectedly, Meta Materials can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Meta Materials will offset losses from the drop in Meta Materials' long position.| Enphase Energy vs. First Solar | Enphase Energy vs. Sunrun Inc | Enphase Energy vs. Canadian Solar | Enphase Energy vs. SolarEdge Technologies |
| Meta Materials vs. Cps Technologies | Meta Materials vs. Kopin | Meta Materials vs. Wallbox NV | Meta Materials vs. Corning Incorporated |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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