Correlation Between Axion Power and Solid Power

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

By analyzing existing cross correlation between Axion Power International and Solid Power, you can compare the effects of market volatilities on Axion Power and Solid 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 Axion Power with a short position of Solid Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axion Power and Solid Power.

Diversification Opportunities for Axion Power and Solid Power

0.0

Correlation Coefficient

Axion Power  Solid Power

Pay attention - limited upside

The 3 months correlation between Axion and Solid is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Axion Power International and Solid Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solid Power and Axion 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 Axion Power International are associated (or correlated) with Solid Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solid Power has no effect on the direction of Axion Power i.e., Axion Power and Solid Power go up and down completely randomly.

Pair Corralation between Axion Power and Solid Power

If you would invest (100.00) in Axion Power International on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Axion Power International or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Axion Power International  vs.  Solid Power

Axion Power International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Axion Power International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Axion Power is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Solid Power

Risk-Adjusted Performance

Very Weak

Over the last 90 days Solid Power has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Axion Power and Solid Power

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

The idea behind Axion Power International and Solid Power 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.