Correlation Between FREYR Battery and Tantalus Systems
Can any of the company-specific risk be diversified away by investing in both FREYR Battery and Tantalus Systems 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 Tantalus Systems 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 Tantalus Systems Holding, you can compare the effects of market volatilities on FREYR Battery and Tantalus Systems 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 Tantalus Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of FREYR Battery and Tantalus Systems.
Diversification Opportunities for FREYR Battery and Tantalus Systems
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FREYR and Tantalus is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding FREYR Battery SA and Tantalus Systems Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tantalus Systems Holding 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 Tantalus Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tantalus Systems Holding has no effect on the direction of FREYR Battery i.e., FREYR Battery and Tantalus Systems go up and down completely randomly.
Pair Corralation between FREYR Battery and Tantalus Systems
Given the investment horizon of 90 days FREYR Battery SA is expected to generate 2.54 times more return on investment than Tantalus Systems. However, FREYR Battery is 2.54 times more volatile than Tantalus Systems Holding. It trades about 0.03 of its potential returns per unit of risk. Tantalus Systems Holding is currently generating about 0.03 per unit of risk. If you would invest 266.00 in FREYR Battery SA on August 25, 2024 and sell it today you would lose (21.00) from holding FREYR Battery SA or give up 7.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
FREYR Battery SA vs. Tantalus Systems Holding
Performance |
| Timeline |
| FREYR Battery SA |
| Tantalus Systems Holding |
FREYR Battery and Tantalus Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FREYR Battery and Tantalus Systems
The main advantage of trading using opposite FREYR Battery and Tantalus Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FREYR Battery position performs unexpectedly, Tantalus Systems 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 Tantalus Systems will offset losses from the drop in Tantalus Systems' long position.| FREYR Battery vs. Solid Power | FREYR Battery vs. Enovix Corp | FREYR Battery vs. Microvast Holdings | FREYR Battery vs. LiCycle Holdings Corp |
| Tantalus Systems vs. FREYR Battery SA | Tantalus Systems vs. nVent Electric PLC | Tantalus Systems vs. Hubbell | Tantalus Systems vs. Advanced Energy Industries |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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