Correlation Between SES AI and Johnson Electric
Can any of the company-specific risk be diversified away by investing in both SES AI and Johnson Electric 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 SES AI and Johnson Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SES AI Corp and Johnson Electric Holdings, you can compare the effects of market volatilities on SES AI and Johnson Electric 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 SES AI with a short position of Johnson Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of SES AI and Johnson Electric.
Diversification Opportunities for SES AI and Johnson Electric
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between SES and Johnson is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding SES AI Corp and Johnson Electric Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Electric Holdings and SES AI 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 SES AI Corp are associated (or correlated) with Johnson Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Electric Holdings has no effect on the direction of SES AI i.e., SES AI and Johnson Electric go up and down completely randomly.
Pair Corralation between SES AI and Johnson Electric
Considering the 90-day investment horizon SES AI Corp is expected to under-perform the Johnson Electric. In addition to that, SES AI is 2.44 times more volatile than Johnson Electric Holdings. It trades about -0.05 of its total potential returns per unit of risk. Johnson Electric Holdings is currently generating about 0.03 per unit of volatility. If you would invest 131.00 in Johnson Electric Holdings on September 12, 2024 and sell it today you would earn a total of 9.00 from holding Johnson Electric Holdings or generate 6.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 56.19% |
| Values | Daily Returns |
SES AI Corp vs. Johnson Electric Holdings
Performance |
| Timeline |
| SES AI Corp |
| Johnson Electric Holdings |
SES AI and Johnson Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SES AI and Johnson Electric
The main advantage of trading using opposite SES AI and Johnson Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SES AI position performs unexpectedly, Johnson Electric 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 Johnson Electric will offset losses from the drop in Johnson Electric's long position.| SES AI vs. Cooper Stnd | SES AI vs. Motorcar Parts of | SES AI vs. American Axle Manufacturing | SES AI vs. Stoneridge |
| Johnson Electric vs. Aeye Inc | Johnson Electric vs. ECARX Holdings Class | Johnson Electric vs. SES AI Corp | Johnson Electric vs. Hyliion 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |