Correlation Between Energous and Sobr Safe

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

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

Diversification Opportunities for Energous and Sobr Safe

0.83

Correlation Coefficient

Energous  Sobr Safe

Very poor diversification

The 3 months correlation between Energous and Sobr is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Energous and Sobr Safe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sobr Safe and Energous 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 Energous are associated (or correlated) with Sobr Safe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sobr Safe has no effect on the direction of Energous i.e., Energous and Sobr Safe go up and down completely randomly.

Pair Corralation between Energous and Sobr Safe

Given the investment horizon of 90 days Energous is expected to under-perform the Sobr Safe. But the stock apears to be less risky and, when comparing its historical volatility, Energous is 5.67 times less risky than Sobr Safe. The stock trades about -0.17 of its potential returns per unit of risk. The Sobr Safe is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,177  in Sobr Safe on September 3, 2024 and sell it today you would lose (647.00) from holding Sobr Safe or give up 54.97% of portfolio value over 90 days.

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

Energous  vs.  Sobr Safe

Energous

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Energous has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Sobr Safe

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sobr Safe are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady fundamental drivers, Sobr Safe reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Energous and Sobr Safe

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

The idea behind Energous and Sobr Safe 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.