Correlation Between Bird Global and Energy Vault

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

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

Diversification Opportunities for Bird Global and Energy Vault

-0.63

Correlation Coefficient

Bird Global  Energy Vault

Excellent diversification

The 3 months correlation between Bird and Energy is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bird Global and Energy Vault Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Vault Holdings and Bird Global 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 Bird Global are associated (or correlated) with Energy Vault. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Vault Holdings has no effect on the direction of Bird Global i.e., Bird Global and Energy Vault go up and down completely randomly.

Pair Corralation between Bird Global and Energy Vault

If you would invest  94.00  in Energy Vault Holdings on September 3, 2024 and sell it today you would earn a total of  112.00  from holding Energy Vault Holdings or generate 119.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Bird Global  vs.  Energy Vault Holdings

Bird Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bird Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Bird Global is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Energy Vault Holdings

Risk-Adjusted Performance

13 of 100

Good

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

Pair Trading with Bird Global and Energy Vault

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

The idea behind Bird Global and Energy Vault Holdings 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.