Correlation Between NET Power and Ardelyx

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

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

Diversification Opportunities for NET Power and Ardelyx

0.21

Correlation Coefficient

NET Power  Ardelyx

Modest diversification

The 3 months correlation between NET and Ardelyx is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding NET Power and Ardelyx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardelyx and NET Power 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 NET Power are associated (or correlated) with Ardelyx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardelyx has no effect on the direction of NET Power i.e., NET Power and Ardelyx go up and down completely randomly.

Pair Corralation between NET Power and Ardelyx

Given the investment horizon of 90 days NET Power is expected to generate 2.67 times more return on investment than Ardelyx. However, NET Power is 2.67 times more volatile than Ardelyx. It trades about 0.11 of its potential returns per unit of risk. Ardelyx is currently generating about 0.23 per unit of risk. If you would invest  175.00  in NET Power on May 28, 2025 and sell it today you would earn a total of  79.00  from holding NET Power or generate 45.14% return on investment over 90 days.

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

NET Power  vs.  Ardelyx

NET Power

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in NET Power are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, NET Power reported solid returns over the last few months and may actually be approaching a breakup point.

Ardelyx

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ardelyx are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Ardelyx showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NET Power and Ardelyx

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

The idea behind NET Power and Ardelyx 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..