Correlation Between Expion360 and CBAK Energy

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

By analyzing existing cross correlation between Expion360 and CBAK Energy Technology, you can compare the effects of market volatilities on Expion360 and CBAK Energy 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 CBAK Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expion360 and CBAK Energy.

Diversification Opportunities for Expion360 and CBAK Energy

0.02

Correlation Coefficient

Expion360  CBAK Energy

Significant diversification

The 3 months correlation between Expion360 and CBAK is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Expion360 and CBAK Energy Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBAK Energy Technology 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 CBAK Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBAK Energy Technology has no effect on the direction of Expion360 i.e., Expion360 and CBAK Energy go up and down completely randomly.

Pair Corralation between Expion360 and CBAK Energy

Given the investment horizon of 90 days Expion360 is expected to under-perform the CBAK Energy. In addition to that, Expion360 is 3.4 times more volatile than CBAK Energy Technology. It trades about -0.03 of its total potential returns per unit of risk. CBAK Energy Technology is currently generating about -0.01 per unit of volatility. If you would invest  102.00  in CBAK Energy Technology on September 2, 2024 and sell it today you would lose (8.00) from holding CBAK Energy Technology or give up 7.84% of portfolio value over 90 days.

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

Expion360  vs.  CBAK Energy Technology

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.

CBAK Energy Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CBAK Energy Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CBAK Energy is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Expion360 and CBAK Energy

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

The idea behind Expion360 and CBAK Energy Technology 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.