Correlation Between Solid Power and Chardan NexTech
Can any of the company-specific risk be diversified away by investing in both Solid Power and Chardan NexTech 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 Solid Power and Chardan NexTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solid Power and Chardan NexTech Acquisition, you can compare the effects of market volatilities on Solid Power and Chardan NexTech 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 Solid Power with a short position of Chardan NexTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solid Power and Chardan NexTech.
Diversification Opportunities for Solid Power and Chardan NexTech
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Solid and Chardan is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Solid Power and Chardan NexTech Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chardan NexTech Acqu and Solid 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 Solid Power are associated (or correlated) with Chardan NexTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chardan NexTech Acqu has no effect on the direction of Solid Power i.e., Solid Power and Chardan NexTech go up and down completely randomly.
Pair Corralation between Solid Power and Chardan NexTech
Given the investment horizon of 90 days Solid Power is expected to generate 1.11 times more return on investment than Chardan NexTech. However, Solid Power is 1.11 times more volatile than Chardan NexTech Acquisition. It trades about 0.1 of its potential returns per unit of risk. Chardan NexTech Acquisition is currently generating about -0.06 per unit of risk. If you would invest 113.00 in Solid Power on November 3, 2024 and sell it today you would earn a total of 26.00 from holding Solid Power or generate 23.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solid Power vs. Chardan NexTech Acquisition
Performance |
| Timeline |
| Solid Power |
| Chardan NexTech Acqu |
Solid Power and Chardan NexTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solid Power and Chardan NexTech
The main advantage of trading using opposite Solid Power and Chardan NexTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solid Power position performs unexpectedly, Chardan NexTech 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 Chardan NexTech will offset losses from the drop in Chardan NexTech's long position.| Solid Power vs. Plug Power | Solid Power vs. FREYR Battery SA | Solid Power vs. FuelCell Energy | Solid Power vs. Enovix Corp |
| Chardan NexTech vs. Polar Power | Chardan NexTech vs. Eos Energy Enterprises | Chardan NexTech vs. Sunrise New Energy | Chardan NexTech vs. AFC Energy plc |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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