Correlation Between Enovix Corp and Solid Power
Can any of the company-specific risk be diversified away by investing in both Enovix Corp and Solid 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 Solid 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 Solid Power, you can compare the effects of market volatilities on Enovix Corp and Solid 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 Solid Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enovix Corp and Solid Power.
Diversification Opportunities for Enovix Corp and Solid Power
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Enovix and Solid is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Enovix Corp and Solid Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solid Power 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 Solid Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solid Power has no effect on the direction of Enovix Corp i.e., Enovix Corp and Solid Power go up and down completely randomly.
Pair Corralation between Enovix Corp and Solid Power
Given the investment horizon of 90 days Enovix Corp is expected to generate 1.63 times more return on investment than Solid Power. However, Enovix Corp is 1.63 times more volatile than Solid Power. It trades about 0.01 of its potential returns per unit of risk. Solid Power is currently generating about -0.08 per unit of risk. If you would invest 1,078 in Enovix Corp on August 24, 2024 and sell it today you would lose (168.00) from holding Enovix Corp or give up 15.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enovix Corp vs. Solid Power
Performance |
| Timeline |
| Enovix Corp |
| Solid Power |
Enovix Corp and Solid Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enovix Corp and Solid Power
The main advantage of trading using opposite Enovix Corp and Solid Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enovix Corp position performs unexpectedly, Solid 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 Solid Power will offset losses from the drop in Solid Power'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 |
| Solid Power vs. Plug Power | Solid Power vs. FREYR Battery SA | Solid Power vs. FuelCell Energy | Solid Power vs. Enovix Corp |
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 Stocks Directory module to find actively traded stocks across global markets.
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