Correlation Between Commercial Vehicle and Xos Equity
Can any of the company-specific risk be diversified away by investing in both Commercial Vehicle and Xos Equity 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 Commercial Vehicle and Xos Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial Vehicle Group and Xos Equity Warrants, you can compare the effects of market volatilities on Commercial Vehicle and Xos Equity 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 Commercial Vehicle with a short position of Xos Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Vehicle and Xos Equity.
Diversification Opportunities for Commercial Vehicle and Xos Equity
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Commercial and Xos is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle Group and Xos Equity Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xos Equity Warrants and Commercial Vehicle 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 Commercial Vehicle Group are associated (or correlated) with Xos Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xos Equity Warrants has no effect on the direction of Commercial Vehicle i.e., Commercial Vehicle and Xos Equity go up and down completely randomly.
Pair Corralation between Commercial Vehicle and Xos Equity
Given the investment horizon of 90 days Commercial Vehicle Group is expected to generate 0.37 times more return on investment than Xos Equity. However, Commercial Vehicle Group is 2.7 times less risky than Xos Equity. It trades about -0.16 of its potential returns per unit of risk. Xos Equity Warrants is currently generating about -0.23 per unit of risk. If you would invest 319.00 in Commercial Vehicle Group on August 29, 2024 and sell it today you would lose (78.00) from holding Commercial Vehicle Group or give up 24.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commercial Vehicle Group vs. Xos Equity Warrants
Performance |
| Timeline |
| Commercial Vehicle |
| Xos Equity Warrants |
Commercial Vehicle and Xos Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial Vehicle and Xos Equity
The main advantage of trading using opposite Commercial Vehicle and Xos Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial Vehicle position performs unexpectedly, Xos Equity 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 Xos Equity will offset losses from the drop in Xos Equity's long position.| Commercial Vehicle vs. Motorcar Parts of | Commercial Vehicle vs. Monro Muffler Brake | Commercial Vehicle vs. Stoneridge | Commercial Vehicle vs. Superior Industries International |
| Xos Equity vs. Microvast Holdings | Xos Equity vs. EVgo Equity Warrants | Xos Equity vs. Faraday Future Intelligent | Xos Equity vs. Xos Inc |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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