Correlation Between Enovix Corp and Flux Power
Can any of the company-specific risk be diversified away by investing in both Enovix Corp and Flux Power 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 Enovix Corp and Flux Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enovix Corp and Flux Power Holdings, you can compare the effects of market volatilities on Enovix Corp and Flux Power 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 Enovix Corp with a short position of Flux Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enovix Corp and Flux Power.
Diversification Opportunities for Enovix Corp and Flux Power
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Enovix and Flux is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Enovix Corp and Flux Power Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flux Power Holdings and Enovix Corp 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 Enovix Corp are associated (or correlated) with Flux Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flux Power Holdings has no effect on the direction of Enovix Corp i.e., Enovix Corp and Flux Power go up and down completely randomly.
Pair Corralation between Enovix Corp and Flux Power
Given the investment horizon of 90 days Enovix Corp is expected to generate 1.21 times more return on investment than Flux Power. However, Enovix Corp is 1.21 times more volatile than Flux Power Holdings. It trades about 0.01 of its potential returns per unit of risk. Flux Power Holdings is currently generating about -0.01 per unit of risk. If you would invest 1,239 in Enovix Corp on August 27, 2024 and sell it today you would lose (296.00) from holding Enovix Corp or give up 23.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enovix Corp vs. Flux Power Holdings
Performance |
| Timeline |
| Enovix Corp |
| Flux Power Holdings |
Enovix Corp and Flux Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enovix Corp and Flux Power
The main advantage of trading using opposite Enovix Corp and Flux Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enovix Corp position performs unexpectedly, Flux Power 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 Flux Power will offset losses from the drop in Flux Power's long position.| Enovix Corp vs. Bloom Energy Corp | Enovix Corp vs. Eos Energy Enterprises | Enovix Corp vs. Sunrise New Energy | Enovix Corp vs. Flux Power Holdings |
| Flux Power vs. Espey Mfg Electronics | Flux Power vs. NeoVolta Warrant | Flux Power vs. Kimball Electronics | Flux Power vs. Hayward Holdings |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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