Correlation Between Arts Way and Lion Electric
Can any of the company-specific risk be diversified away by investing in both Arts Way and Lion Electric 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 Arts Way and Lion Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arts Way Manufacturing Co and Lion Electric Corp, you can compare the effects of market volatilities on Arts Way and Lion Electric 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 Arts Way with a short position of Lion Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arts Way and Lion Electric.
Diversification Opportunities for Arts Way and Lion Electric
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arts and Lion is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Arts Way Manufacturing Co and Lion Electric Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Electric Corp and Arts Way 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 Arts Way Manufacturing Co are associated (or correlated) with Lion Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Electric Corp has no effect on the direction of Arts Way i.e., Arts Way and Lion Electric go up and down completely randomly.
Pair Corralation between Arts Way and Lion Electric
Given the investment horizon of 90 days Arts Way Manufacturing Co is expected to generate 13.41 times more return on investment than Lion Electric. However, Arts Way is 13.41 times more volatile than Lion Electric Corp. It trades about 0.08 of its potential returns per unit of risk. Lion Electric Corp is currently generating about -0.16 per unit of risk. If you would invest 174.00 in Arts Way Manufacturing Co on August 28, 2024 and sell it today you would lose (7.00) from holding Arts Way Manufacturing Co or give up 4.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arts Way Manufacturing Co vs. Lion Electric Corp
Performance |
| Timeline |
| Arts Way Manufacturing |
| Lion Electric Corp |
Arts Way and Lion Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arts Way and Lion Electric
The main advantage of trading using opposite Arts Way and Lion Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arts Way position performs unexpectedly, Lion Electric 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 Lion Electric will offset losses from the drop in Lion Electric's long position.| Arts Way vs. First Tractor | Arts Way vs. Ag Growth International | Arts Way vs. AmeraMex International | Arts Way vs. American Premium Water |
| Lion Electric vs. Xos Inc | Lion Electric vs. Nikola Corp | Lion Electric vs. Wabash National | Lion Electric vs. American Premium Water |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Stocks Directory Find actively traded stocks across global markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |