Correlation Between Stardust Power and Erayak Power
Can any of the company-specific risk be diversified away by investing in both Stardust Power and Erayak Power 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 Stardust Power and Erayak Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stardust Power and Erayak Power Solution, you can compare the effects of market volatilities on Stardust Power and Erayak Power 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 Stardust Power with a short position of Erayak Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stardust Power and Erayak Power.
Diversification Opportunities for Stardust Power and Erayak Power
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stardust and Erayak is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Stardust Power and Erayak Power Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erayak Power Solution and Stardust 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 Stardust Power are associated (or correlated) with Erayak Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erayak Power Solution has no effect on the direction of Stardust Power i.e., Stardust Power and Erayak Power go up and down completely randomly.
Pair Corralation between Stardust Power and Erayak Power
Assuming the 90 days horizon Stardust Power is expected to generate 2.01 times more return on investment than Erayak Power. However, Stardust Power is 2.01 times more volatile than Erayak Power Solution. It trades about 0.08 of its potential returns per unit of risk. Erayak Power Solution is currently generating about 0.07 per unit of risk. If you would invest 21.00 in Stardust Power on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Stardust Power or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 70.63% |
| Values | Daily Returns |
Stardust Power vs. Erayak Power Solution
Performance |
| Timeline |
| Stardust Power |
| Erayak Power Solution |
Stardust Power and Erayak Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stardust Power and Erayak Power
The main advantage of trading using opposite Stardust Power and Erayak Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stardust Power position performs unexpectedly, Erayak Power 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 Erayak Power will offset losses from the drop in Erayak Power's long position.| Stardust Power vs. Bloom Energy Corp | Stardust Power vs. Electrovaya Common Shares | Stardust Power vs. Enovix Corp | Stardust Power vs. Eos Energy Enterprises |
| Erayak Power vs. Solid Power | Erayak Power vs. Enovix Corp | Erayak Power vs. Microvast Holdings | Erayak Power 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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