Correlation Between NeoVolta Common and Chardan NexTech

Can any of the company-specific risk be diversified away by investing in both NeoVolta Common and Chardan NexTech 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 NeoVolta Common and Chardan NexTech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NeoVolta Common Stock and Chardan NexTech Acquisition, you can compare the effects of market volatilities on NeoVolta Common and Chardan NexTech 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 NeoVolta Common with a short position of Chardan NexTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeoVolta Common and Chardan NexTech.

Diversification Opportunities for NeoVolta Common and Chardan NexTech

-0.37

Correlation Coefficient

NeoVolta Common  Chardan NexTech

Very good diversification

The 3 months correlation between NeoVolta and Chardan is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding NeoVolta Common Stock and Chardan NexTech Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chardan NexTech Acqu and NeoVolta Common 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 NeoVolta Common Stock are associated (or correlated) with Chardan NexTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chardan NexTech Acqu has no effect on the direction of NeoVolta Common i.e., NeoVolta Common and Chardan NexTech go up and down completely randomly.

Pair Corralation between NeoVolta Common and Chardan NexTech

Given the investment horizon of 90 days NeoVolta Common Stock is expected to generate 0.35 times more return on investment than Chardan NexTech. However, NeoVolta Common Stock is 2.82 times less risky than Chardan NexTech. It trades about 0.15 of its potential returns per unit of risk. Chardan NexTech Acquisition is currently generating about -0.03 per unit of risk. If you would invest  334.00  in NeoVolta Common Stock on September 12, 2024 and sell it today you would earn a total of  169.00  from holding NeoVolta Common Stock or generate 50.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	92.06%
Values	Daily Returns

NeoVolta Common Stock  vs.  Chardan NexTech Acquisition

NeoVolta Common Stock

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NeoVolta Common Stock are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, NeoVolta Common showed solid returns over the last few months and may actually be approaching a breakup point.

Chardan NexTech Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chardan NexTech Acquisition 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 forward indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with NeoVolta Common and Chardan NexTech

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

The idea behind NeoVolta Common Stock and Chardan NexTech Acquisition 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.