Correlation Between Enovix Corp and NVent Electric
Can any of the company-specific risk be diversified away by investing in both Enovix Corp and NVent Electric 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 NVent Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enovix Corp and nVent Electric PLC, you can compare the effects of market volatilities on Enovix Corp and NVent Electric 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 NVent Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enovix Corp and NVent Electric.
Diversification Opportunities for Enovix Corp and NVent Electric
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enovix and NVent is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Enovix Corp and nVent Electric PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on nVent Electric PLC 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 NVent Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of nVent Electric PLC has no effect on the direction of Enovix Corp i.e., Enovix Corp and NVent Electric go up and down completely randomly.
Pair Corralation between Enovix Corp and NVent Electric
Given the investment horizon of 90 days Enovix Corp is expected to generate 5.95 times more return on investment than NVent Electric. However, Enovix Corp is 5.95 times more volatile than nVent Electric PLC. It trades about 0.08 of its potential returns per unit of risk. nVent Electric PLC is currently generating about 0.21 per unit of risk. If you would invest 1,001 in Enovix Corp on October 22, 2024 and sell it today you would earn a total of 71.00 from holding Enovix Corp or generate 7.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enovix Corp vs. nVent Electric PLC
Performance |
| Timeline |
| Enovix Corp |
| nVent Electric PLC |
Enovix Corp and NVent Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enovix Corp and NVent Electric
The main advantage of trading using opposite Enovix Corp and NVent Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enovix Corp position performs unexpectedly, NVent Electric 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 NVent Electric will offset losses from the drop in NVent Electric's long position.| Enovix Corp vs. ESS Tech | Enovix Corp vs. FREYR Battery SA | Enovix Corp vs. Microvast Holdings | Enovix Corp vs. Eos Energy Enterprises |
| NVent Electric vs. Hubbell | NVent Electric vs. Advanced Energy Industries | NVent Electric vs. Vertiv Holdings Co | NVent Electric vs. Energizer 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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