Correlation Between FREYR Battery and Pioneer Power
Can any of the company-specific risk be diversified away by investing in both FREYR Battery and Pioneer 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 FREYR Battery and Pioneer Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FREYR Battery SA and Pioneer Power Solutions, you can compare the effects of market volatilities on FREYR Battery and Pioneer 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 FREYR Battery with a short position of Pioneer Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of FREYR Battery and Pioneer Power.
Diversification Opportunities for FREYR Battery and Pioneer Power
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FREYR and Pioneer is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding FREYR Battery SA and Pioneer Power Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Power Solutions and FREYR Battery 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 FREYR Battery SA are associated (or correlated) with Pioneer Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Power Solutions has no effect on the direction of FREYR Battery i.e., FREYR Battery and Pioneer Power go up and down completely randomly.
Pair Corralation between FREYR Battery and Pioneer Power
Given the investment horizon of 90 days FREYR Battery SA is expected to generate 5.05 times more return on investment than Pioneer Power. However, FREYR Battery is 5.05 times more volatile than Pioneer Power Solutions. It trades about 0.3 of its potential returns per unit of risk. Pioneer Power Solutions is currently generating about -0.02 per unit of risk. If you would invest 105.00 in FREYR Battery SA on August 27, 2024 and sell it today you would earn a total of 140.00 from holding FREYR Battery SA or generate 133.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FREYR Battery SA vs. Pioneer Power Solutions
Performance |
| Timeline |
| FREYR Battery SA |
| Pioneer Power Solutions |
FREYR Battery and Pioneer Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FREYR Battery and Pioneer Power
The main advantage of trading using opposite FREYR Battery and Pioneer Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FREYR Battery position performs unexpectedly, Pioneer 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 Pioneer Power will offset losses from the drop in Pioneer Power's long position.| FREYR Battery vs. Solid Power | FREYR Battery vs. Enovix Corp | FREYR Battery vs. Microvast Holdings | FREYR Battery vs. LiCycle Holdings Corp |
| Pioneer Power vs. CBAK Energy Technology | Pioneer Power vs. Ocean Power Technologies | Pioneer Power vs. Ideal Power | Pioneer Power vs. Expion360 |
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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