Correlation Between Microvast Holdings and Amprius Technologies

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

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

Diversification Opportunities for Microvast Holdings and Amprius Technologies

0.4

Correlation Coefficient

Microvast Holdings  Amprius Technologies

Very weak diversification

The 3 months correlation between Microvast and Amprius is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Microvast Holdings and Amprius Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amprius Technologies and Microvast 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 Microvast Holdings are associated (or correlated) with Amprius Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amprius Technologies has no effect on the direction of Microvast Holdings i.e., Microvast Holdings and Amprius Technologies go up and down completely randomly.

Pair Corralation between Microvast Holdings and Amprius Technologies

Given the investment horizon of 90 days Microvast Holdings is expected to under-perform the Amprius Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Microvast Holdings is 1.09 times less risky than Amprius Technologies. The stock trades about -0.14 of its potential returns per unit of risk. The Amprius Technologies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  298.00  in Amprius Technologies on December 30, 2024 and sell it today you would lose (17.00) from holding Amprius Technologies or give up 5.7% of portfolio value over 90 days.

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

Microvast Holdings  vs.  Amprius Technologies

Microvast Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Microvast Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.

Amprius Technologies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amprius Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Amprius Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microvast Holdings and Amprius Technologies

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

The idea behind Microvast Holdings and Amprius Technologies 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.