Correlation Between Enovix Corp and Amprius Technologies

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

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

Diversification Opportunities for Enovix Corp and Amprius Technologies

0.05

Correlation Coefficient

Enovix Corp  Amprius Technologies

Significant diversification

The 3 months correlation between Enovix and Amprius is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Enovix Corp and Amprius Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amprius Technologies 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 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 Enovix Corp i.e., Enovix Corp and Amprius Technologies go up and down completely randomly.

Pair Corralation between Enovix Corp and Amprius Technologies

Given the investment horizon of 90 days Enovix Corp is expected to generate 6.33 times less return on investment than Amprius Technologies. But when comparing it to its historical volatility, Enovix Corp is 1.8 times less risky than Amprius Technologies. It trades about 0.05 of its potential returns per unit of risk. Amprius Technologies is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  99.00  in Amprius Technologies on September 3, 2024 and sell it today you would earn a total of  115.00  from holding Amprius Technologies or generate 116.16% return on investment over 90 days.

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

Enovix Corp  vs.  Amprius Technologies

Enovix Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Enovix Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Enovix Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Amprius Technologies

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amprius Technologies are ranked lower than 12 (%) 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 Enovix Corp and Amprius Technologies

The main advantage of trading using opposite Enovix Corp and Amprius Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enovix Corp 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 Enovix Corp 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.