Correlation Between Microvast Holdings and Pioneer Power
Can any of the company-specific risk be diversified away by investing in both Microvast Holdings 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 Microvast Holdings and Pioneer Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microvast Holdings and Pioneer Power Solutions, you can compare the effects of market volatilities on Microvast Holdings 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 Microvast Holdings with a short position of Pioneer Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microvast Holdings and Pioneer Power.
Diversification Opportunities for Microvast Holdings and Pioneer Power
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Microvast and Pioneer is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Microvast Holdings 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 Microvast Holdings 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 Microvast Holdings 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 Microvast Holdings i.e., Microvast Holdings and Pioneer Power go up and down completely randomly.
Pair Corralation between Microvast Holdings and Pioneer Power
Given the investment horizon of 90 days Microvast Holdings is expected to generate 8.21 times more return on investment than Pioneer Power. However, Microvast Holdings is 8.21 times more volatile than Pioneer Power Solutions. It trades about 0.07 of its potential returns per unit of risk. Pioneer Power Solutions is currently generating about 0.1 per unit of risk. If you would invest 33.00 in Microvast Holdings on August 24, 2024 and sell it today you would earn a total of 26.04 from holding Microvast Holdings or generate 78.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microvast Holdings vs. Pioneer Power Solutions
Performance |
| Timeline |
| Microvast Holdings |
| Pioneer Power Solutions |
Microvast Holdings and Pioneer Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microvast Holdings and Pioneer Power
The main advantage of trading using opposite Microvast Holdings and Pioneer Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microvast Holdings 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.| Microvast Holdings vs. FREYR Battery SA | Microvast Holdings vs. Bloom Energy Corp | Microvast Holdings vs. Enovix Corp | Microvast Holdings vs. Plug Power |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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