Correlation Between Kansai Electric and Energy Vault

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

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

Diversification Opportunities for Kansai Electric and Energy Vault

0.0

Correlation Coefficient

Kansai Electric  Energy Vault

Pay attention - limited upside

The 3 months correlation between Kansai and Energy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Kansai Electric 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 Kansai Electric 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 The Kansai Electric 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 Kansai Electric i.e., Kansai Electric and Energy Vault go up and down completely randomly.

Pair Corralation between Kansai Electric and Energy Vault

If you would invest  101.00  in Energy Vault Holdings on September 5, 2024 and sell it today you would earn a total of  70.00  from holding Energy Vault Holdings or generate 69.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	44.71%
Values	Daily Returns

The Kansai Electric  vs.  Energy Vault Holdings

Kansai Electric

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Kansai Electric has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Kansai Electric is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Energy Vault Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Energy Vault Holdings are ranked lower than 11 (%) 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 Kansai Electric and Energy Vault

The main advantage of trading using opposite Kansai Electric and Energy Vault positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kansai Electric 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 The Kansai Electric 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.