Correlation Between NeoVolta Common and FREYR Battery
Can any of the company-specific risk be diversified away by investing in both NeoVolta Common and FREYR Battery 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 NeoVolta Common and FREYR Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NeoVolta Common Stock and FREYR Battery SA, you can compare the effects of market volatilities on NeoVolta Common and FREYR Battery 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 NeoVolta Common with a short position of FREYR Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeoVolta Common and FREYR Battery.
Diversification Opportunities for NeoVolta Common and FREYR Battery
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NeoVolta and FREYR is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding NeoVolta Common Stock and FREYR Battery SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FREYR Battery SA and NeoVolta Common 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 NeoVolta Common Stock are associated (or correlated) with FREYR Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FREYR Battery SA has no effect on the direction of NeoVolta Common i.e., NeoVolta Common and FREYR Battery go up and down completely randomly.
Pair Corralation between NeoVolta Common and FREYR Battery
Given the investment horizon of 90 days NeoVolta Common Stock is expected to generate 1.55 times more return on investment than FREYR Battery. However, NeoVolta Common is 1.55 times more volatile than FREYR Battery SA. It trades about -0.24 of its potential returns per unit of risk. FREYR Battery SA is currently generating about -0.39 per unit of risk. If you would invest 532.00 in NeoVolta Common Stock on November 3, 2024 and sell it today you would lose (170.00) from holding NeoVolta Common Stock or give up 31.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NeoVolta Common Stock vs. FREYR Battery SA
Performance |
| Timeline |
| NeoVolta Common Stock |
| FREYR Battery SA |
NeoVolta Common and FREYR Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NeoVolta Common and FREYR Battery
The main advantage of trading using opposite NeoVolta Common and FREYR Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NeoVolta Common position performs unexpectedly, FREYR Battery 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 FREYR Battery will offset losses from the drop in FREYR Battery's long position.| NeoVolta Common vs. Energizer Holdings | NeoVolta Common vs. Acuity Brands | NeoVolta Common vs. Espey Mfg Electronics | NeoVolta Common vs. Preformed Line Products |
| FREYR Battery vs. Solid Power | FREYR Battery vs. Enovix Corp | FREYR Battery vs. Microvast Holdings | FREYR Battery vs. LiCycle Holdings Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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