Correlation Between BAIC and Vicinity
Can any of the company-specific risk be diversified away by investing in both BAIC and Vicinity 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 and Vicinity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BAIC Motor and Vicinity Motor Corp, you can compare the effects of market volatilities on BAIC and Vicinity 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 with a short position of Vicinity. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAIC and Vicinity.
Diversification Opportunities for BAIC and Vicinity
Average diversification
The 3 months correlation between BAIC and Vicinity is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding BAIC Motor and Vicinity Motor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicinity Motor Corp and BAIC 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 Vicinity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vicinity Motor Corp has no effect on the direction of BAIC i.e., BAIC and Vicinity go up and down completely randomly.
Pair Corralation between BAIC and Vicinity
Assuming the 90 days horizon BAIC Motor is expected to under-perform the Vicinity. But the pink sheet apears to be less risky and, when comparing its historical volatility, BAIC Motor is 5.42 times less risky than Vicinity. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Vicinity Motor Corp is currently generating about 0.65 of returns per unit of risk over similar time horizon. If you would invest 0.11 in Vicinity Motor Corp on October 23, 2024 and sell it today you would earn a total of 0.08 from holding Vicinity Motor Corp or generate 72.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 36.84% |
| Values | Daily Returns |
BAIC Motor vs. Vicinity Motor Corp
Performance |
| Timeline |
| BAIC Motor |
| Vicinity Motor Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BAIC and Vicinity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BAIC and Vicinity
The main advantage of trading using opposite BAIC and Vicinity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAIC position performs unexpectedly, Vicinity 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 Vicinity will offset losses from the drop in Vicinity's long position.| BAIC vs. Zapp Electric Vehicles | BAIC vs. First Hydrogen Corp | BAIC vs. Guangzhou Automobile Group | BAIC vs. Phoenix Motor Common |
| Vicinity vs. Blue Bird Corp | Vicinity vs. AYRO Inc | Vicinity vs. BAIC Motor | Vicinity vs. Zapp Electric Vehicles |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |