Correlation Between Energy Vault and Azure Power

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

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

Diversification Opportunities for Energy Vault and Azure Power

0.0

Correlation Coefficient

Energy Vault  Azure Power

Pay attention - limited upside

The 3 months correlation between Energy and Azure is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Energy Vault Holdings and Azure Power Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azure Power Global and Energy Vault 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 Energy Vault Holdings are associated (or correlated) with Azure Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azure Power Global has no effect on the direction of Energy Vault i.e., Energy Vault and Azure Power go up and down completely randomly.

Pair Corralation between Energy Vault and Azure Power

If you would invest (100.00) in Azure Power Global on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Azure Power Global or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Energy Vault Holdings  vs.  Azure Power Global

Energy Vault Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Energy Vault 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 technical and fundamental indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Azure Power Global

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Energy Vault and Azure Power

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

The idea behind Energy Vault Holdings and Azure Power Global 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.

Check out your portfolio center.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.