Correlation Between Solid Power and Ballard Power
Can any of the company-specific risk be diversified away by investing in both Solid Power and Ballard Power 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 Solid Power and Ballard Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solid Power and Ballard Power Systems, you can compare the effects of market volatilities on Solid Power and Ballard Power 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 Solid Power with a short position of Ballard Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solid Power and Ballard Power.
Diversification Opportunities for Solid Power and Ballard Power
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Solid and Ballard is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Solid Power and Ballard Power Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballard Power Systems and Solid 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 Solid Power are associated (or correlated) with Ballard Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballard Power Systems has no effect on the direction of Solid Power i.e., Solid Power and Ballard Power go up and down completely randomly.
Pair Corralation between Solid Power and Ballard Power
Given the investment horizon of 90 days Solid Power is expected to generate 1.44 times more return on investment than Ballard Power. However, Solid Power is 1.44 times more volatile than Ballard Power Systems. It trades about 0.36 of its potential returns per unit of risk. Ballard Power Systems is currently generating about 0.21 per unit of risk. If you would invest 114.00 in Solid Power on April 25, 2025 and sell it today you would earn a total of 317.00 from holding Solid Power or generate 278.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Solid Power vs. Ballard Power Systems
Performance |
Timeline |
Solid Power |
Ballard Power Systems |
Solid Power and Ballard Power Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Solid Power and Ballard Power
The main advantage of trading using opposite Solid Power and Ballard Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solid Power position performs unexpectedly, Ballard Power 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 Ballard Power will offset losses from the drop in Ballard Power's long position.Solid Power vs. Microvast Holdings | Solid Power vs. Bloom Energy Corp | Solid Power vs. Enovix Corp | Solid Power vs. Plug Power |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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