Correlation Between Salient Mlp and Aeva Technologies

Can any of the company-specific risk be diversified away by investing in both Salient Mlp and Aeva 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 Salient Mlp and Aeva Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Salient Mlp Energy and Aeva Technologies, you can compare the effects of market volatilities on Salient Mlp and Aeva 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 Salient Mlp with a short position of Aeva Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salient Mlp and Aeva Technologies.

Diversification Opportunities for Salient Mlp and Aeva Technologies

-0.73

Correlation Coefficient

Salient Mlp  Aeva Technologies

Pay attention - limited upside

The 3 months correlation between Salient and Aeva is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Salient Mlp Energy and Aeva Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeva Technologies and Salient Mlp 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 Salient Mlp Energy are associated (or correlated) with Aeva Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeva Technologies has no effect on the direction of Salient Mlp i.e., Salient Mlp and Aeva Technologies go up and down completely randomly.

Pair Corralation between Salient Mlp and Aeva Technologies

Assuming the 90 days horizon Salient Mlp is expected to generate 22.73 times less return on investment than Aeva Technologies. But when comparing it to its historical volatility, Salient Mlp Energy is 5.61 times less risky than Aeva Technologies. It trades about 0.03 of its potential returns per unit of risk. Aeva Technologies is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  309.00  in Aeva Technologies on February 26, 2024 and sell it today you would earn a total of  32.00  from holding Aeva Technologies or generate 10.36% return on investment over 90 days.

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

Salient Mlp Energy  vs.  Aeva Technologies

Salient Mlp Energy

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Salient Mlp Energy are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Salient Mlp may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Aeva Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aeva Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat 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.

Pair Trading with Salient Mlp and Aeva Technologies

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

The idea behind Salient Mlp Energy and Aeva 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.