Correlation Between Aeva Technologies and Environmental Solutions
Can any of the company-specific risk be diversified away by investing in both Aeva Technologies and Environmental Solutions 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 Aeva Technologies and Environmental Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeva Technologies and Environmental Solutions Worldwide, you can compare the effects of market volatilities on Aeva Technologies and Environmental Solutions 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 Aeva Technologies with a short position of Environmental Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeva Technologies and Environmental Solutions.
Diversification Opportunities for Aeva Technologies and Environmental Solutions
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aeva and Environmental is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Aeva Technologies and Environmental Solutions Worldw in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Environmental Solutions and Aeva Technologies 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 Aeva Technologies are associated (or correlated) with Environmental Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Environmental Solutions has no effect on the direction of Aeva Technologies i.e., Aeva Technologies and Environmental Solutions go up and down completely randomly.
Pair Corralation between Aeva Technologies and Environmental Solutions
Given the investment horizon of 90 days Aeva Technologies is expected to generate 1.12 times more return on investment than Environmental Solutions. However, Aeva Technologies is 1.12 times more volatile than Environmental Solutions Worldwide. It trades about 0.05 of its potential returns per unit of risk. Environmental Solutions Worldwide is currently generating about -0.22 per unit of risk. If you would invest 436.00 in Aeva Technologies on October 24, 2024 and sell it today you would earn a total of 11.00 from holding Aeva Technologies or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Aeva Technologies vs. Environmental Solutions Worldw
Performance |
| Timeline |
| Aeva Technologies |
| Environmental Solutions |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Aeva Technologies and Environmental Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeva Technologies and Environmental Solutions
The main advantage of trading using opposite Aeva Technologies and Environmental Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeva Technologies position performs unexpectedly, Environmental Solutions 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 Environmental Solutions will offset losses from the drop in Environmental Solutions' long position.| Aeva Technologies vs. Innoviz Technologies | Aeva Technologies vs. Hesai Group American | Aeva Technologies vs. Luminar Technologies | Aeva Technologies vs. Aeye Inc |
| Environmental Solutions vs. Luminar Technologies | Environmental Solutions vs. Innoviz Technologies | Environmental Solutions vs. Quantumscape Corp | Environmental Solutions vs. Aeva Technologies |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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