Correlation Between Ault Alliance and CBAK Energy
Can any of the company-specific risk be diversified away by investing in both Ault Alliance and CBAK Energy 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 Ault Alliance and CBAK Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ault Alliance and CBAK Energy Technology, you can compare the effects of market volatilities on Ault Alliance and CBAK Energy 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 Ault Alliance with a short position of CBAK Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ault Alliance and CBAK Energy.
Diversification Opportunities for Ault Alliance and CBAK Energy
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ault and CBAK is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ault Alliance and CBAK Energy Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBAK Energy Technology and Ault Alliance 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 Ault Alliance are associated (or correlated) with CBAK Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBAK Energy Technology has no effect on the direction of Ault Alliance i.e., Ault Alliance and CBAK Energy go up and down completely randomly.
Pair Corralation between Ault Alliance and CBAK Energy
Given the investment horizon of 90 days Ault Alliance is expected to under-perform the CBAK Energy. In addition to that, Ault Alliance is 1.55 times more volatile than CBAK Energy Technology. It trades about -0.1 of its total potential returns per unit of risk. CBAK Energy Technology is currently generating about -0.06 per unit of volatility. If you would invest 104.00 in CBAK Energy Technology on January 23, 2024 and sell it today you would lose (8.00) from holding CBAK Energy Technology or give up 7.69% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ault Alliance vs. CBAK Energy Technology
Performance |
Timeline |
Ault Alliance |
CBAK Energy Technology |
Ault Alliance and CBAK Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ault Alliance and CBAK Energy
The main advantage of trading using opposite Ault Alliance and CBAK Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ault Alliance position performs unexpectedly, CBAK Energy 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 CBAK Energy will offset losses from the drop in CBAK Energy's long position.Ault Alliance vs. Kaman | Ault Alliance vs. Innovative Solutions and | Ault Alliance vs. National Presto Industries | Ault Alliance vs. Hexcel |
CBAK Energy vs. Advanced Energy Industries | CBAK Energy vs. Kimball Electronics | CBAK Energy vs. Energizer Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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