Correlation Between ChargePoint Holdings and ATRenew

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

Diversification Opportunities for ChargePoint Holdings and ATRenew

0.02
  Correlation Coefficient

Significant diversification

The 3 months correlation between ChargePoint and ATRenew is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding ChargePoint Holdings and ATRenew Inc DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRenew Inc DRC and ChargePoint Holdings 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 ChargePoint Holdings are associated (or correlated) with ATRenew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRenew Inc DRC has no effect on the direction of ChargePoint Holdings i.e., ChargePoint Holdings and ATRenew go up and down completely randomly.

Pair Corralation between ChargePoint Holdings and ATRenew

Given the investment horizon of 90 days ChargePoint Holdings is expected to under-perform the ATRenew. In addition to that, ChargePoint Holdings is 1.19 times more volatile than ATRenew Inc DRC. It trades about -0.04 of its total potential returns per unit of risk. ATRenew Inc DRC is currently generating about 0.05 per unit of volatility. If you would invest  231.00  in ATRenew Inc DRC on October 7, 2024 and sell it today you would earn a total of  44.00  from holding ATRenew Inc DRC or generate 19.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

ChargePoint Holdings  vs.  ATRenew Inc DRC

 Performance 
       Timeline  
ChargePoint Holdings 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days ChargePoint Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
ATRenew Inc DRC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ATRenew Inc DRC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ATRenew is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

ChargePoint Holdings and ATRenew Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ChargePoint Holdings and ATRenew

The main advantage of trading using opposite ChargePoint Holdings and ATRenew positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChargePoint Holdings position performs unexpectedly, ATRenew 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 ATRenew will offset losses from the drop in ATRenew's long position.
The idea behind ChargePoint Holdings and ATRenew Inc DRC 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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