Correlation Between Solid Power and Erayak Power
Can any of the company-specific risk be diversified away by investing in both Solid 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 Solid 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 Solid Power and Erayak Power Solution, you can compare the effects of market volatilities on Solid 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 Solid Power with a short position of Erayak Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solid Power and Erayak Power.
Diversification Opportunities for Solid Power and Erayak Power
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Solid and Erayak is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Solid 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 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 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 Solid Power i.e., Solid Power and Erayak Power go up and down completely randomly.
Pair Corralation between Solid Power and Erayak Power
Given the investment horizon of 90 days Solid Power is expected to under-perform the Erayak Power. But the stock apears to be less risky and, when comparing its historical volatility, Solid Power is 1.66 times less risky than Erayak Power. The stock trades about -0.01 of its potential returns per unit of risk. The Erayak Power Solution is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 337.00 in Erayak Power Solution on August 30, 2024 and sell it today you would lose (217.00) from holding Erayak Power Solution or give up 64.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Solid Power vs. Erayak Power Solution
Performance |
| Timeline |
| Solid Power |
| Erayak Power Solution |
Solid Power and Erayak Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solid Power and Erayak Power
The main advantage of trading using opposite Solid Power and Erayak Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solid 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.| Solid Power vs. Plug Power | Solid Power vs. FREYR Battery SA | Solid Power vs. FuelCell Energy | Solid Power vs. Enovix Corp |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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