Correlation Between ESS Tech and CBAK Energy
Can any of the company-specific risk be diversified away by investing in both ESS Tech and CBAK Energy 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 ESS Tech and CBAK Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESS Tech and CBAK Energy Technology, you can compare the effects of market volatilities on ESS Tech and CBAK Energy 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 ESS Tech with a short position of CBAK Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESS Tech and CBAK Energy.
Diversification Opportunities for ESS Tech and CBAK Energy
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ESS and CBAK is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding ESS Tech and CBAK Energy Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBAK Energy Technology and ESS Tech 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 ESS Tech are associated (or correlated) with CBAK Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBAK Energy Technology has no effect on the direction of ESS Tech i.e., ESS Tech and CBAK Energy go up and down completely randomly.
Pair Corralation between ESS Tech and CBAK Energy
Considering the 90-day investment horizon ESS Tech is expected to under-perform the CBAK Energy. In addition to that, ESS Tech is 1.46 times more volatile than CBAK Energy Technology. It trades about -0.03 of its total potential returns per unit of risk. CBAK Energy Technology is currently generating about 0.02 per unit of volatility. If you would invest 103.00 in CBAK Energy Technology on August 28, 2024 and sell it today you would lose (8.00) from holding CBAK Energy Technology or give up 7.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ESS Tech vs. CBAK Energy Technology
Performance |
| Timeline |
| ESS Tech |
| CBAK Energy Technology |
ESS Tech and CBAK Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESS Tech and CBAK Energy
The main advantage of trading using opposite ESS Tech and CBAK Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESS Tech position performs unexpectedly, CBAK Energy 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 CBAK Energy will offset losses from the drop in CBAK Energy's long position.| ESS Tech vs. Fluence Energy | ESS Tech vs. Solid Power | ESS Tech vs. Eos Energy Enterprises | ESS Tech vs. FREYR Battery SA |
| CBAK Energy vs. Pioneer Power Solutions | CBAK Energy vs. Ocean Power Technologies | CBAK Energy vs. Ideal Power | CBAK Energy 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |