Correlation Between Solid Power and NN
Can any of the company-specific risk be diversified away by investing in both Solid Power and NN 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 NN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solid Power and NN Inc, you can compare the effects of market volatilities on Solid Power and NN 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 NN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solid Power and NN.
Diversification Opportunities for Solid Power and NN
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Solid and NN is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Solid Power and NN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NN Inc 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 NN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NN Inc has no effect on the direction of Solid Power i.e., Solid Power and NN go up and down completely randomly.
Pair Corralation between Solid Power and NN
Assuming the 90 days horizon Solid Power is expected to under-perform the NN. In addition to that, Solid Power is 2.35 times more volatile than NN Inc. It trades about -0.22 of its total potential returns per unit of risk. NN Inc is currently generating about 0.03 per unit of volatility. If you would invest 316.00 in NN Inc on November 2, 2024 and sell it today you would earn a total of 0.00 from holding NN Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solid Power vs. NN Inc
Performance |
| Timeline |
| Solid Power |
| NN Inc |
Solid Power and NN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solid Power and NN
The main advantage of trading using opposite Solid Power and NN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solid Power position performs unexpectedly, NN 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 NN will offset losses from the drop in NN's long position.| Solid Power vs. Solid Power | Solid Power vs. EVgo Equity Warrants | Solid Power vs. Microvast Holdings | Solid Power vs. IONQ WT |
| NN vs. Steel Partners Holdings | NN vs. Compass Diversified | NN vs. Brookfield Business Partners | NN vs. Matthews International |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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