Correlation Between FREYR Battery and Solid Power
Can any of the company-specific risk be diversified away by investing in both FREYR Battery 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 FREYR Battery and Solid 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 Solid Power, you can compare the effects of market volatilities on FREYR Battery 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 FREYR Battery with a short position of Solid Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of FREYR Battery and Solid Power.
Diversification Opportunities for FREYR Battery and Solid Power
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FREYR and Solid is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding FREYR Battery SA and Solid Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solid Power 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 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 FREYR Battery i.e., FREYR Battery and Solid Power go up and down completely randomly.
Pair Corralation between FREYR Battery and Solid Power
Given the investment horizon of 90 days FREYR Battery SA is expected to generate 0.88 times more return on investment than Solid Power. However, FREYR Battery SA is 1.14 times less risky than Solid Power. It trades about -0.39 of its potential returns per unit of risk. Solid Power is currently generating about -0.36 per unit of risk. If you would invest 273.00 in FREYR Battery SA on November 3, 2024 and sell it today you would lose (85.00) from holding FREYR Battery SA or give up 31.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FREYR Battery SA vs. Solid Power
Performance |
| Timeline |
| FREYR Battery SA |
| Solid Power |
FREYR Battery and Solid Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FREYR Battery and Solid Power
The main advantage of trading using opposite FREYR Battery and Solid Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FREYR Battery 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.| FREYR Battery vs. Solid Power | FREYR Battery vs. Enovix Corp | FREYR Battery vs. Microvast Holdings | FREYR Battery vs. LiCycle Holdings Corp |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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