Correlation Between Microvast Holdings and Acuity Brands
Can any of the company-specific risk be diversified away by investing in both Microvast Holdings and Acuity Brands 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 Microvast Holdings and Acuity Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microvast Holdings and Acuity Brands, you can compare the effects of market volatilities on Microvast Holdings and Acuity Brands 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 Microvast Holdings with a short position of Acuity Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microvast Holdings and Acuity Brands.
Diversification Opportunities for Microvast Holdings and Acuity Brands
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microvast and Acuity is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Microvast Holdings and Acuity Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acuity Brands and Microvast Holdings 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 Microvast Holdings are associated (or correlated) with Acuity Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acuity Brands has no effect on the direction of Microvast Holdings i.e., Microvast Holdings and Acuity Brands go up and down completely randomly.
Pair Corralation between Microvast Holdings and Acuity Brands
Given the investment horizon of 90 days Microvast Holdings is expected to under-perform the Acuity Brands. In addition to that, Microvast Holdings is 4.21 times more volatile than Acuity Brands. It trades about -0.28 of its total potential returns per unit of risk. Acuity Brands is currently generating about -0.15 per unit of volatility. If you would invest 26,167 in Acuity Brands on February 2, 2024 and sell it today you would lose (1,251) from holding Acuity Brands or give up 4.78% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.65% |
Values | Daily Returns |
Microvast Holdings vs. Acuity Brands
Performance |
Timeline |
Microvast Holdings |
Acuity Brands |
Microvast Holdings and Acuity Brands Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Microvast Holdings and Acuity Brands
The main advantage of trading using opposite Microvast Holdings and Acuity Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microvast Holdings position performs unexpectedly, Acuity Brands 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 Acuity Brands will offset losses from the drop in Acuity Brands' long position.Microvast Holdings vs. Kimball Electronics | Microvast Holdings vs. Hollysys Automation Technologies | Microvast Holdings vs. Hayward Holdings | Microvast Holdings vs. nVent Electric PLC |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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