Correlation Between Nuscale Power and Weichai Power
Can any of the company-specific risk be diversified away by investing in both Nuscale Power and Weichai 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 Nuscale Power and Weichai Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuscale Power Corp and Weichai Power, you can compare the effects of market volatilities on Nuscale Power and Weichai 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 Nuscale Power with a short position of Weichai Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuscale Power and Weichai Power.
Diversification Opportunities for Nuscale Power and Weichai Power
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nuscale and Weichai is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nuscale Power Corp and Weichai Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weichai Power and Nuscale 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 Nuscale Power Corp are associated (or correlated) with Weichai Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weichai Power has no effect on the direction of Nuscale Power i.e., Nuscale Power and Weichai Power go up and down completely randomly.
Pair Corralation between Nuscale Power and Weichai Power
Considering the 90-day investment horizon Nuscale Power Corp is expected to generate 2.34 times more return on investment than Weichai Power. However, Nuscale Power is 2.34 times more volatile than Weichai Power. It trades about 0.08 of its potential returns per unit of risk. Weichai Power is currently generating about -0.02 per unit of risk. If you would invest 825.00 in Nuscale Power Corp on September 2, 2024 and sell it today you would earn a total of 2,140 from holding Nuscale Power Corp or generate 259.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 6.45% |
| Values | Daily Returns |
Nuscale Power Corp vs. Weichai Power
Performance |
| Timeline |
| Nuscale Power Corp |
| Weichai Power |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nuscale Power and Weichai Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuscale Power and Weichai Power
The main advantage of trading using opposite Nuscale Power and Weichai Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuscale Power position performs unexpectedly, Weichai 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 Weichai Power will offset losses from the drop in Weichai Power's long position.| Nuscale Power vs. Cummins | Nuscale Power vs. Chart Industries | Nuscale Power vs. GE Aerospace | Nuscale Power vs. Nel ASA |
| Weichai Power vs. Shanghai Electric Group | Weichai Power vs. Xinjiang Goldwind Science | Weichai Power vs. Nordson | Weichai Power vs. CVD Equipment |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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