Correlation Between CubicFarm Systems and Lion Electric
Can any of the company-specific risk be diversified away by investing in both CubicFarm Systems 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 CubicFarm Systems and Lion Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CubicFarm Systems Corp and Lion Electric Corp, you can compare the effects of market volatilities on CubicFarm Systems 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 CubicFarm Systems with a short position of Lion Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of CubicFarm Systems and Lion Electric.
Diversification Opportunities for CubicFarm Systems and Lion Electric
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between CubicFarm and Lion is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding CubicFarm Systems Corp 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 CubicFarm Systems 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 CubicFarm Systems Corp 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 CubicFarm Systems i.e., CubicFarm Systems and Lion Electric go up and down completely randomly.
Pair Corralation between CubicFarm Systems and Lion Electric
Assuming the 90 days horizon CubicFarm Systems Corp is expected to generate 19.31 times more return on investment than Lion Electric. However, CubicFarm Systems is 19.31 times more volatile than Lion Electric Corp. It trades about 0.16 of its potential returns per unit of risk. Lion Electric Corp is currently generating about -0.08 per unit of risk. If you would invest 15.00 in CubicFarm Systems Corp on September 3, 2024 and sell it today you would earn a total of 5.00 from holding CubicFarm Systems Corp or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 93.12% |
| Values | Daily Returns |
CubicFarm Systems Corp vs. Lion Electric Corp
Performance |
| Timeline |
| CubicFarm Systems Corp |
| Lion Electric Corp |
CubicFarm Systems and Lion Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CubicFarm Systems and Lion Electric
The main advantage of trading using opposite CubicFarm Systems and Lion Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CubicFarm Systems 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.| CubicFarm Systems vs. Lion Electric Corp | CubicFarm Systems vs. Nikola Corp | CubicFarm Systems vs. Buhler Industries | CubicFarm Systems vs. Toyota Industries |
| Lion Electric vs. Manitowoc | Lion Electric vs. Alamo Group | Lion Electric vs. AGCO Corporation | Lion Electric vs. Hyster Yale Materials Handling |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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