Correlation Between Energy Vault and Lundin Energy
Can any of the company-specific risk be diversified away by investing in both Energy Vault and Lundin 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 Energy Vault and Lundin Energy 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 Lundin Energy AB, you can compare the effects of market volatilities on Energy Vault and Lundin 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 Energy Vault with a short position of Lundin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Vault and Lundin Energy.
Diversification Opportunities for Energy Vault and Lundin Energy
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Energy and Lundin is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Energy Vault Holdings and Lundin Energy AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Energy AB 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 Lundin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Energy AB has no effect on the direction of Energy Vault i.e., Energy Vault and Lundin Energy go up and down completely randomly.
Pair Corralation between Energy Vault and Lundin Energy
Given the investment horizon of 90 days Energy Vault Holdings is expected to generate 4.06 times more return on investment than Lundin Energy. However, Energy Vault is 4.06 times more volatile than Lundin Energy AB. It trades about 0.03 of its potential returns per unit of risk. Lundin Energy AB is currently generating about -0.14 per unit of risk. If you would invest 204.00 in Energy Vault Holdings on November 1, 2024 and sell it today you would lose (19.00) from holding Energy Vault Holdings or give up 9.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Energy Vault Holdings vs. Lundin Energy AB
Performance |
| Timeline |
| Energy Vault Holdings |
| Lundin Energy AB |
Energy Vault and Lundin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Vault and Lundin Energy
The main advantage of trading using opposite Energy Vault and Lundin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Vault position performs unexpectedly, Lundin 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 Lundin Energy will offset losses from the drop in Lundin Energy'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 |
| Lundin Energy vs. Renew Energy Global | Lundin Energy vs. Energy Vault Holdings | Lundin Energy vs. Fluence Energy | Lundin Energy vs. Advent Technologies 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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