Correlation Between Microvast Holdings and TMC The

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

By analyzing existing cross correlation between Microvast Holdings and TMC the metals, you can compare the effects of market volatilities on Microvast Holdings and TMC The 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 TMC The. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microvast Holdings and TMC The.

Diversification Opportunities for Microvast Holdings and TMC The

-0.03

Correlation Coefficient

Microvast Holdings  TMC The

Good diversification

The 3 months correlation between Microvast and TMC is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Microvast Holdings and TMC the metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMC the metals 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 TMC The. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMC the metals has no effect on the direction of Microvast Holdings i.e., Microvast Holdings and TMC The go up and down completely randomly.

Pair Corralation between Microvast Holdings and TMC The

Assuming the 90 days horizon Microvast Holdings is expected to generate 1.26 times less return on investment than TMC The. But when comparing it to its historical volatility, Microvast Holdings is 1.15 times less risky than TMC The. It trades about 0.2 of its potential returns per unit of risk. TMC the metals is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  46.00  in TMC the metals on February 17, 2025 and sell it today you would earn a total of  29.00  from holding TMC the metals or generate 63.04% return on investment over 90 days.

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

Microvast Holdings  vs.  TMC the metals

Microvast Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Microvast Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Microvast Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

TMC the metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TMC the metals are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, TMC The showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microvast Holdings and TMC The

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

The idea behind Microvast Holdings and TMC the metals 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.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.