Correlation Between Microvast Holdings and ReNew Energy
Can any of the company-specific risk be diversified away by investing in both Microvast Holdings and ReNew 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 Microvast Holdings and ReNew Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microvast Holdings and ReNew Energy Global, you can compare the effects of market volatilities on Microvast Holdings and ReNew 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 Microvast Holdings with a short position of ReNew Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microvast Holdings and ReNew Energy.
Diversification Opportunities for Microvast Holdings and ReNew Energy
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microvast and ReNew is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Microvast Holdings and ReNew Energy Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReNew Energy Global 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 ReNew Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReNew Energy Global has no effect on the direction of Microvast Holdings i.e., Microvast Holdings and ReNew Energy go up and down completely randomly.
Pair Corralation between Microvast Holdings and ReNew Energy
Assuming the 90 days horizon Microvast Holdings is expected to generate 1.53 times more return on investment than ReNew Energy. However, Microvast Holdings is 1.53 times more volatile than ReNew Energy Global. It trades about 0.04 of its potential returns per unit of risk. ReNew Energy Global is currently generating about 0.02 per unit of risk. If you would invest 27.00 in Microvast Holdings on August 30, 2024 and sell it today you would lose (18.74) from holding Microvast Holdings or give up 69.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.39% |
| Values | Daily Returns |
Microvast Holdings vs. ReNew Energy Global
Performance |
| Timeline |
| Microvast Holdings |
| ReNew Energy Global |
Microvast Holdings and ReNew Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microvast Holdings and ReNew Energy
The main advantage of trading using opposite Microvast Holdings and ReNew Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microvast Holdings position performs unexpectedly, ReNew 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 ReNew Energy will offset losses from the drop in ReNew Energy's 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 |
| ReNew Energy vs. Renew Energy Global | ReNew Energy vs. Xos Equity Warrants | ReNew Energy vs. Microvast Holdings | ReNew Energy vs. AEye Inc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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