Correlation Between FREYR Battery and Sunrise New

Can any of the company-specific risk be diversified away by investing in both FREYR Battery and Sunrise New 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 FREYR Battery and Sunrise New into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FREYR Battery SA and Sunrise New Energy, you can compare the effects of market volatilities on FREYR Battery and Sunrise New 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 FREYR Battery with a short position of Sunrise New. Check out your portfolio center. Please also check ongoing floating volatility patterns of FREYR Battery and Sunrise New.

Diversification Opportunities for FREYR Battery and Sunrise New

-0.24

Correlation Coefficient

FREYR Battery  Sunrise New

Very good diversification

The 3 months correlation between FREYR and Sunrise is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding FREYR Battery SA and Sunrise New Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunrise New Energy and FREYR Battery 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 FREYR Battery SA are associated (or correlated) with Sunrise New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunrise New Energy has no effect on the direction of FREYR Battery i.e., FREYR Battery and Sunrise New go up and down completely randomly.

Pair Corralation between FREYR Battery and Sunrise New

Given the investment horizon of 90 days FREYR Battery SA is expected to generate 1.55 times more return on investment than Sunrise New. However, FREYR Battery is 1.55 times more volatile than Sunrise New Energy. It trades about -0.01 of its potential returns per unit of risk. Sunrise New Energy is currently generating about -0.25 per unit of risk. If you would invest  183.00  in FREYR Battery SA on February 3, 2024 and sell it today you would lose (5.00) from holding FREYR Battery SA or give up 2.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

FREYR Battery SA  vs.  Sunrise New Energy

FREYR Battery SA

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FREYR Battery SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, FREYR Battery showed solid returns over the last few months and may actually be approaching a breakup point.

Sunrise New Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sunrise New Energy 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 stable which may send shares a bit higher in June 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with FREYR Battery and Sunrise New

The main advantage of trading using opposite FREYR Battery and Sunrise New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FREYR Battery position performs unexpectedly, Sunrise New 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 Sunrise New will offset losses from the drop in Sunrise New's long position.

The idea behind FREYR Battery SA and Sunrise New Energy 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.