Correlation Between Solid Power and Honeywell International
Can any of the company-specific risk be diversified away by investing in both Solid Power and Honeywell International 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 Honeywell International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solid Power and Honeywell International, you can compare the effects of market volatilities on Solid Power and Honeywell International 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 Honeywell International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solid Power and Honeywell International.
Diversification Opportunities for Solid Power and Honeywell International
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Solid and Honeywell is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Solid Power and Honeywell International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Honeywell International 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 Honeywell International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Honeywell International has no effect on the direction of Solid Power i.e., Solid Power and Honeywell International go up and down completely randomly.
Pair Corralation between Solid Power and Honeywell International
Given the investment horizon of 90 days Solid Power is expected to under-perform the Honeywell International. In addition to that, Solid Power is 2.67 times more volatile than Honeywell International. It trades about -0.09 of its total potential returns per unit of risk. Honeywell International is currently generating about 0.41 per unit of volatility. If you would invest 20,509 in Honeywell International on August 28, 2024 and sell it today you would earn a total of 2,551 from holding Honeywell International or generate 12.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solid Power vs. Honeywell International
Performance |
| Timeline |
| Solid Power |
| Honeywell International |
Solid Power and Honeywell International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solid Power and Honeywell International
The main advantage of trading using opposite Solid Power and Honeywell International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solid Power position performs unexpectedly, Honeywell International 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 Honeywell International will offset losses from the drop in Honeywell International's long position.| Solid Power vs. Plug Power | Solid Power vs. FREYR Battery SA | Solid Power vs. FuelCell Energy | Solid Power vs. Enovix 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |