Correlation Between BAIC MotorLimited and Stellantis
Can any of the company-specific risk be diversified away by investing in both BAIC MotorLimited and Stellantis 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 BAIC MotorLimited and Stellantis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BAIC Motor and Stellantis NV, you can compare the effects of market volatilities on BAIC MotorLimited and Stellantis 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 BAIC MotorLimited with a short position of Stellantis. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAIC MotorLimited and Stellantis.
Diversification Opportunities for BAIC MotorLimited and Stellantis
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BAIC and Stellantis is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding BAIC Motor and Stellantis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stellantis NV and BAIC MotorLimited 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 BAIC Motor are associated (or correlated) with Stellantis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stellantis NV has no effect on the direction of BAIC MotorLimited i.e., BAIC MotorLimited and Stellantis go up and down completely randomly.
Pair Corralation between BAIC MotorLimited and Stellantis
Assuming the 90 days horizon BAIC Motor is expected to generate 1.3 times more return on investment than Stellantis. However, BAIC MotorLimited is 1.3 times more volatile than Stellantis NV. It trades about 0.19 of its potential returns per unit of risk. Stellantis NV is currently generating about -0.06 per unit of risk. If you would invest 27.00 in BAIC Motor on August 31, 2024 and sell it today you would earn a total of 3.00 from holding BAIC Motor or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BAIC Motor vs. Stellantis NV
Performance |
| Timeline |
| BAIC MotorLimited |
| Stellantis NV |
BAIC MotorLimited and Stellantis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BAIC MotorLimited and Stellantis
The main advantage of trading using opposite BAIC MotorLimited and Stellantis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAIC MotorLimited position performs unexpectedly, Stellantis 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 Stellantis will offset losses from the drop in Stellantis' long position.| BAIC MotorLimited vs. Zapp Electric Vehicles | BAIC MotorLimited vs. First Hydrogen Corp | BAIC MotorLimited vs. Guangzhou Automobile Group | BAIC MotorLimited vs. Phoenix Motor Common |
| Stellantis vs. Tesla Inc | Stellantis vs. Li Auto | Stellantis vs. Rivian Automotive | Stellantis vs. Lucid Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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