Correlation Between Microvast Holdings and Enersys
Can any of the company-specific risk be diversified away by investing in both Microvast Holdings and Enersys 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 Enersys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microvast Holdings and Enersys, you can compare the effects of market volatilities on Microvast Holdings and Enersys 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 Enersys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microvast Holdings and Enersys.
Diversification Opportunities for Microvast Holdings and Enersys
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microvast and Enersys is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Microvast Holdings and Enersys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enersys 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 Enersys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enersys has no effect on the direction of Microvast Holdings i.e., Microvast Holdings and Enersys go up and down completely randomly.
Pair Corralation between Microvast Holdings and Enersys
Assuming the 90 days horizon Microvast Holdings is expected to generate 7.38 times more return on investment than Enersys. However, Microvast Holdings is 7.38 times more volatile than Enersys. It trades about 0.04 of its potential returns per unit of risk. Enersys is currently generating about 0.02 per unit of risk. If you would invest 25.00 in Microvast Holdings on August 27, 2024 and sell it today you would lose (17.88) from holding Microvast Holdings or give up 71.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.12% |
| Values | Daily Returns |
Microvast Holdings vs. Enersys
Performance |
| Timeline |
| Microvast Holdings |
| Enersys |
Microvast Holdings and Enersys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microvast Holdings and Enersys
The main advantage of trading using opposite Microvast Holdings and Enersys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microvast Holdings position performs unexpectedly, Enersys 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 Enersys will offset losses from the drop in Enersys' long position.| Microvast Holdings vs. Microvast Holdings | Microvast Holdings vs. EVgo Equity Warrants | Microvast Holdings vs. Paysafe Ltd Wt | Microvast Holdings vs. Faraday Future Intelligent |
| Enersys vs. Bloom Energy Corp | Enersys vs. Eos Energy Enterprises | Enersys vs. Sunrise New Energy | Enersys vs. Flux Power Holdings |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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