Correlation Between Expion360 and Enovix Corp

Can any of the company-specific risk be diversified away by investing in both Expion360 and Enovix Corp 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 Expion360 and Enovix Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Expion360 and Enovix Corp, you can compare the effects of market volatilities on Expion360 and Enovix Corp 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 Expion360 with a short position of Enovix Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expion360 and Enovix Corp.

Diversification Opportunities for Expion360 and Enovix Corp

-0.42

Correlation Coefficient

Expion360  Enovix Corp

Very good diversification

The 3 months correlation between Expion360 and Enovix is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Expion360 and Enovix Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enovix Corp and Expion360 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 Expion360 are associated (or correlated) with Enovix Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enovix Corp has no effect on the direction of Expion360 i.e., Expion360 and Enovix Corp go up and down completely randomly.

Pair Corralation between Expion360 and Enovix Corp

Given the investment horizon of 90 days Expion360 is expected to under-perform the Enovix Corp. In addition to that, Expion360 is 2.56 times more volatile than Enovix Corp. It trades about -0.03 of its total potential returns per unit of risk. Enovix Corp is currently generating about 0.05 per unit of volatility. If you would invest  863.00  in Enovix Corp on September 2, 2024 and sell it today you would earn a total of  62.00  from holding Enovix Corp or generate 7.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Expion360  vs.  Enovix Corp

Expion360

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Expion360 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 basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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 unsteady basic indicators, Enovix Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Expion360 and Enovix Corp

The main advantage of trading using opposite Expion360 and Enovix Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expion360 position performs unexpectedly, Enovix Corp 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 Enovix Corp will offset losses from the drop in Enovix Corp's long position.

The idea behind Expion360 and Enovix Corp 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.