Correlation Between Enovix Corp and NeoVolta Warrant

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

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

Diversification Opportunities for Enovix Corp and NeoVolta Warrant

-0.13

Correlation Coefficient

Enovix Corp  NeoVolta Warrant

Good diversification

The 3 months correlation between Enovix and NeoVolta is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Enovix Corp and NeoVolta Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeoVolta Warrant and Enovix Corp 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 Enovix Corp are associated (or correlated) with NeoVolta Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeoVolta Warrant has no effect on the direction of Enovix Corp i.e., Enovix Corp and NeoVolta Warrant go up and down completely randomly.

Pair Corralation between Enovix Corp and NeoVolta Warrant

Given the investment horizon of 90 days Enovix Corp is expected to generate 64.78 times less return on investment than NeoVolta Warrant. But when comparing it to its historical volatility, Enovix Corp is 25.62 times less risky than NeoVolta Warrant. It trades about 0.06 of its potential returns per unit of risk. NeoVolta Warrant is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  40.00  in NeoVolta Warrant on October 9, 2024 and sell it today you would earn a total of  155.00  from holding NeoVolta Warrant or generate 387.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	67.27%
Values	Daily Returns

Enovix Corp  vs.  NeoVolta Warrant

Enovix Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enovix Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Enovix Corp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

NeoVolta Warrant

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NeoVolta Warrant are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, NeoVolta Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enovix Corp and NeoVolta Warrant

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

The idea behind Enovix Corp and NeoVolta Warrant 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.