Correlation Between Envirotech Vehicles and SES AI

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

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

Diversification Opportunities for Envirotech Vehicles and SES AI

0.62

Correlation Coefficient

Envirotech Vehicles  SES AI

Poor diversification

The 3 months correlation between Envirotech and SES is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Envirotech Vehicles and SES AI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES AI Corp and Envirotech Vehicles 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 Envirotech Vehicles are associated (or correlated) with SES AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES AI Corp has no effect on the direction of Envirotech Vehicles i.e., Envirotech Vehicles and SES AI go up and down completely randomly.

Pair Corralation between Envirotech Vehicles and SES AI

Given the investment horizon of 90 days Envirotech Vehicles is expected to generate 0.53 times more return on investment than SES AI. However, Envirotech Vehicles is 1.88 times less risky than SES AI. It trades about -0.1 of its potential returns per unit of risk. SES AI Corp is currently generating about -0.16 per unit of risk. If you would invest  184.00  in Envirotech Vehicles on September 15, 2024 and sell it today you would lose (47.00) from holding Envirotech Vehicles or give up 25.54% of portfolio value over 90 days.

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

Envirotech Vehicles  vs.  SES AI Corp

Envirotech Vehicles

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Envirotech Vehicles 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 fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

SES AI Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Envirotech Vehicles and SES AI

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

The idea behind Envirotech Vehicles and SES AI Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.