Correlation Between Energy Vault and Enlight Renewable
Can any of the company-specific risk be diversified away by investing in both Energy Vault and Enlight Renewable 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 Energy Vault and Enlight Renewable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Vault Holdings and Enlight Renewable Energy, you can compare the effects of market volatilities on Energy Vault and Enlight Renewable 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 Energy Vault with a short position of Enlight Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Vault and Enlight Renewable.
Diversification Opportunities for Energy Vault and Enlight Renewable
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Energy and Enlight is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Energy Vault Holdings and Enlight Renewable Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlight Renewable Energy and Energy Vault 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 Energy Vault Holdings are associated (or correlated) with Enlight Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlight Renewable Energy has no effect on the direction of Energy Vault i.e., Energy Vault and Enlight Renewable go up and down completely randomly.
Pair Corralation between Energy Vault and Enlight Renewable
Given the investment horizon of 90 days Energy Vault Holdings is expected to generate 3.51 times more return on investment than Enlight Renewable. However, Energy Vault is 3.51 times more volatile than Enlight Renewable Energy. It trades about 0.08 of its potential returns per unit of risk. Enlight Renewable Energy is currently generating about -0.19 per unit of risk. If you would invest 206.00 in Energy Vault Holdings on October 26, 2024 and sell it today you would earn a total of 13.00 from holding Energy Vault Holdings or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Energy Vault Holdings vs. Enlight Renewable Energy
Performance |
| Timeline |
| Energy Vault Holdings |
| Enlight Renewable Energy |
Energy Vault and Enlight Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Vault and Enlight Renewable
The main advantage of trading using opposite Energy Vault and Enlight Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Vault position performs unexpectedly, Enlight Renewable 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 Enlight Renewable will offset losses from the drop in Enlight Renewable's long position.| Energy Vault vs. Renew Energy Global | Energy Vault vs. Fluence Energy | Energy Vault vs. Enlight Renewable Energy | Energy Vault vs. Advent Technologies Holdings |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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