Correlation Between Electrovaya Common and CBAK Energy

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

By analyzing existing cross correlation between Electrovaya Common Shares and CBAK Energy Technology, you can compare the effects of market volatilities on Electrovaya Common and CBAK Energy 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 Electrovaya Common with a short position of CBAK Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrovaya Common and CBAK Energy.

Diversification Opportunities for Electrovaya Common and CBAK Energy

0.28

Correlation Coefficient

Electrovaya Common  CBAK Energy

Modest diversification

The 3 months correlation between Electrovaya and CBAK is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Electrovaya Common Shares and CBAK Energy Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBAK Energy Technology and Electrovaya Common 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 Electrovaya Common Shares are associated (or correlated) with CBAK Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBAK Energy Technology has no effect on the direction of Electrovaya Common i.e., Electrovaya Common and CBAK Energy go up and down completely randomly.

Pair Corralation between Electrovaya Common and CBAK Energy

Given the investment horizon of 90 days Electrovaya Common Shares is expected to generate 1.19 times more return on investment than CBAK Energy. However, Electrovaya Common is 1.19 times more volatile than CBAK Energy Technology. It trades about 0.0 of its potential returns per unit of risk. CBAK Energy Technology is currently generating about -0.15 per unit of risk. If you would invest  254.00  in Electrovaya Common Shares on December 29, 2024 and sell it today you would lose (9.00) from holding Electrovaya Common Shares or give up 3.54% of portfolio value over 90 days.

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

Electrovaya Common Shares  vs.  CBAK Energy Technology

Electrovaya Common Shares

Risk-Adjusted Performance

Very Weak

Over the last 90 days Electrovaya Common Shares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Electrovaya Common is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

CBAK Energy Technology

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Electrovaya Common and CBAK Energy

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

The idea behind Electrovaya Common Shares and CBAK Energy Technology 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.