Correlation Between Enovix Corp and Amprius Technologies

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Can any of the company-specific risk be diversified away by investing in both Enovix Corp and Amprius Technologies 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 Enovix Corp and Amprius Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enovix Corp and Amprius Technologies, you can compare the effects of market volatilities on Enovix Corp and Amprius Technologies 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 Enovix Corp with a short position of Amprius Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enovix Corp and Amprius Technologies.

Diversification Opportunities for Enovix Corp and Amprius Technologies

0.6
  Correlation Coefficient

Poor diversification

The 3 months correlation between Enovix and Amprius is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Enovix Corp and Amprius Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amprius Technologies and Enovix Corp 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 Enovix Corp are associated (or correlated) with Amprius Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amprius Technologies has no effect on the direction of Enovix Corp i.e., Enovix Corp and Amprius Technologies go up and down completely randomly.

Pair Corralation between Enovix Corp and Amprius Technologies

Given the investment horizon of 90 days Enovix Corp is expected to generate 1.28 times more return on investment than Amprius Technologies. However, Enovix Corp is 1.28 times more volatile than Amprius Technologies. It trades about 0.27 of its potential returns per unit of risk. Amprius Technologies is currently generating about -0.07 per unit of risk. If you would invest  598.00  in Enovix Corp on February 21, 2024 and sell it today you would earn a total of  410.00  from holding Enovix Corp or generate 68.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Enovix Corp  vs.  Amprius Technologies

 Performance 
       Timeline  
Enovix Corp 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Enovix Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Enovix Corp may actually be approaching a critical reversion point that can send shares even higher in June 2024.
Amprius Technologies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Amprius Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Enovix Corp and Amprius Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Enovix Corp and Amprius Technologies

The main advantage of trading using opposite Enovix Corp and Amprius Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enovix Corp position performs unexpectedly, Amprius Technologies 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 Amprius Technologies will offset losses from the drop in Amprius Technologies' long position.
The idea behind Enovix Corp and Amprius Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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