Correlation Between Ocean Power and Microvast Holdings
Can any of the company-specific risk be diversified away by investing in both Ocean Power and Microvast Holdings 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 Ocean Power and Microvast Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocean Power Technologies and Microvast Holdings, you can compare the effects of market volatilities on Ocean Power and Microvast Holdings 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 Ocean Power with a short position of Microvast Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocean Power and Microvast Holdings.
Diversification Opportunities for Ocean Power and Microvast Holdings
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ocean and Microvast is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Power Technologies and Microvast Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microvast Holdings and Ocean Power 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 Ocean Power Technologies are associated (or correlated) with Microvast Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microvast Holdings has no effect on the direction of Ocean Power i.e., Ocean Power and Microvast Holdings go up and down completely randomly.
Pair Corralation between Ocean Power and Microvast Holdings
Given the investment horizon of 90 days Ocean Power is expected to generate 41.57 times less return on investment than Microvast Holdings. But when comparing it to its historical volatility, Ocean Power Technologies is 22.23 times less risky than Microvast Holdings. It trades about 0.11 of its potential returns per unit of risk. Microvast Holdings is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 21.00 in Microvast Holdings on August 27, 2024 and sell it today you would earn a total of 46.00 from holding Microvast Holdings or generate 219.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ocean Power Technologies vs. Microvast Holdings
Performance |
| Timeline |
| Ocean Power Technologies |
| Microvast Holdings |
Ocean Power and Microvast Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocean Power and Microvast Holdings
The main advantage of trading using opposite Ocean Power and Microvast Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocean Power position performs unexpectedly, Microvast Holdings 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 Microvast Holdings will offset losses from the drop in Microvast Holdings' long position.| Ocean Power vs. Pioneer Power Solutions | Ocean Power vs. CBAK Energy Technology | Ocean Power vs. Ideal Power | Ocean Power vs. Expion360 |
| Microvast Holdings vs. FREYR Battery SA | Microvast Holdings vs. Bloom Energy Corp | Microvast Holdings vs. Enovix Corp | Microvast Holdings vs. Plug Power |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |