Correlation Between Energy Vault and Heliogen

Can any of the company-specific risk be diversified away by investing in both Energy Vault and Heliogen 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 Heliogen 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 Heliogen, you can compare the effects of market volatilities on Energy Vault and Heliogen 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 Heliogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Vault and Heliogen.

Diversification Opportunities for Energy Vault and Heliogen

-0.44

Correlation Coefficient

Energy Vault  Heliogen

Very good diversification

The 3 months correlation between Energy and Heliogen is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Energy Vault Holdings and Heliogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heliogen 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 Heliogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heliogen has no effect on the direction of Energy Vault i.e., Energy Vault and Heliogen go up and down completely randomly.

Pair Corralation between Energy Vault and Heliogen

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	Very Weak
Accuracy	1.56%
Values	Daily Returns

Energy Vault Holdings  vs.  Heliogen

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.

Heliogen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Heliogen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Heliogen is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Energy Vault and Heliogen

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

The idea behind Energy Vault Holdings and Heliogen 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.