Correlation Between Westport Fuel and Solid Power
Can any of the company-specific risk be diversified away by investing in both Westport Fuel and Solid 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 Westport Fuel and Solid Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westport Fuel Systems and Solid Power, you can compare the effects of market volatilities on Westport Fuel and Solid 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 Westport Fuel with a short position of Solid Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westport Fuel and Solid Power.
Diversification Opportunities for Westport Fuel and Solid Power
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Westport and Solid is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Westport Fuel Systems and Solid Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solid Power and Westport Fuel 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 Westport Fuel Systems are associated (or correlated) with Solid Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solid Power has no effect on the direction of Westport Fuel i.e., Westport Fuel and Solid Power go up and down completely randomly.
Pair Corralation between Westport Fuel and Solid Power
Given the investment horizon of 90 days Westport Fuel Systems is expected to under-perform the Solid Power. But the stock apears to be less risky and, when comparing its historical volatility, Westport Fuel Systems is 2.72 times less risky than Solid Power. The stock trades about -0.01 of its potential returns per unit of risk. The Solid Power is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 161.00 in Solid Power on June 6, 2025 and sell it today you would earn a total of 232.00 from holding Solid Power or generate 144.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westport Fuel Systems vs. Solid Power
Performance |
| Timeline |
| Westport Fuel Systems |
| Solid Power |
Westport Fuel and Solid Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westport Fuel and Solid Power
The main advantage of trading using opposite Westport Fuel and Solid Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westport Fuel position performs unexpectedly, Solid 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 Solid Power will offset losses from the drop in Solid Power's long position.| Westport Fuel vs. Aeva Technologies, Common | Westport Fuel vs. Foresight Autonomous Holdings | Westport Fuel vs. Hyliion Holdings Corp | Westport Fuel vs. Kandi Technologies Group |
| Solid Power vs. Microvast Holdings | Solid Power vs. Bloom Energy Corp | Solid Power vs. Enovix Corp | Solid Power vs. Plug Power |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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