Correlation Between Eos Energy and Nxu
Can any of the company-specific risk be diversified away by investing in both Eos Energy and Nxu 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 Eos Energy and Nxu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eos Energy Enterprises and Nxu Inc, you can compare the effects of market volatilities on Eos Energy and Nxu 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 Eos Energy with a short position of Nxu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eos Energy and Nxu.
Diversification Opportunities for Eos Energy and Nxu
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eos and Nxu is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Eos Energy Enterprises and Nxu Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nxu Inc and Eos 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 Eos Energy Enterprises are associated (or correlated) with Nxu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nxu Inc has no effect on the direction of Eos Energy i.e., Eos Energy and Nxu go up and down completely randomly.
Pair Corralation between Eos Energy and Nxu
Given the investment horizon of 90 days Eos Energy is expected to generate 11.87 times less return on investment than Nxu. But when comparing it to its historical volatility, Eos Energy Enterprises is 16.74 times less risky than Nxu. It trades about 0.27 of its potential returns per unit of risk. Nxu Inc is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 23.00 in Nxu Inc on October 20, 2024 and sell it today you would earn a total of 32.00 from holding Nxu Inc or generate 139.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eos Energy Enterprises vs. Nxu Inc
Performance |
| Timeline |
| Eos Energy Enterprises |
| Nxu Inc |
Eos Energy and Nxu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eos Energy and Nxu
The main advantage of trading using opposite Eos Energy and Nxu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eos Energy position performs unexpectedly, Nxu 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 Nxu will offset losses from the drop in Nxu's long position.| Eos Energy vs. FREYR Battery SA | Eos Energy vs. Microvast Holdings | Eos Energy vs. Chardan NexTech Acquisition | Eos Energy vs. Solid Power |
| Nxu vs. Chardan NexTech Acquisition | Nxu vs. Polar Power | Nxu vs. Eos Energy Enterprises | Nxu vs. Sunrise New Energy |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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