Correlation Between Select Energy and Energy Vault
Can any of the company-specific risk be diversified away by investing in both Select Energy and Energy Vault 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 Select Energy and Energy Vault into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Select Energy Services and Energy Vault Holdings, you can compare the effects of market volatilities on Select Energy and Energy Vault 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 Select Energy with a short position of Energy Vault. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Energy and Energy Vault.
Diversification Opportunities for Select Energy and Energy Vault
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Select and Energy is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Select Energy Services and Energy Vault Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Vault Holdings and Select Energy 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 Select Energy Services are associated (or correlated) with Energy Vault. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Vault Holdings has no effect on the direction of Select Energy i.e., Select Energy and Energy Vault go up and down completely randomly.
Pair Corralation between Select Energy and Energy Vault
Given the investment horizon of 90 days Select Energy is expected to generate 2.82 times less return on investment than Energy Vault. But when comparing it to its historical volatility, Select Energy Services is 2.18 times less risky than Energy Vault. It trades about 0.11 of its potential returns per unit of risk. Energy Vault Holdings is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 190.00 in Energy Vault Holdings on August 28, 2025 and sell it today you would earn a total of 109.00 from holding Energy Vault Holdings or generate 57.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Select Energy Services vs. Energy Vault Holdings
Performance |
| Timeline |
| Select Energy Services |
| Energy Vault Holdings |
Select Energy and Energy Vault Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Energy and Energy Vault
The main advantage of trading using opposite Select Energy and Energy Vault positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Energy position performs unexpectedly, Energy Vault 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 Energy Vault will offset losses from the drop in Energy Vault's long position.| Select Energy vs. Centaur Media Plc | Select Energy vs. Astro Communications | Select Energy vs. New Ulm Telecom | Select Energy vs. Accel Entertainment |
| Energy Vault vs. 51Talk Online Education | Energy Vault vs. Penn National Gaming | Energy Vault vs. Sharplink Gaming | Energy Vault vs. CleanGo Innovations |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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