Correlation Between Disney and Lightning EMotors
Can any of the company-specific risk be diversified away by investing in both Disney and Lightning EMotors 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 Disney and Lightning EMotors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and Lightning EMotors, you can compare the effects of market volatilities on Disney and Lightning EMotors 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 Disney with a short position of Lightning EMotors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and Lightning EMotors.
Diversification Opportunities for Disney and Lightning EMotors
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Disney and Lightning is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Lightning EMotors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lightning EMotors and Disney 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 Walt Disney are associated (or correlated) with Lightning EMotors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lightning EMotors has no effect on the direction of Disney i.e., Disney and Lightning EMotors go up and down completely randomly.
Pair Corralation between Disney and Lightning EMotors
If you would invest 11,082 in Walt Disney on November 3, 2024 and sell it today you would earn a total of 224.00 from holding Walt Disney or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Walt Disney vs. Lightning EMotors
Performance |
| Timeline |
| Walt Disney |
| Lightning EMotors |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Disney and Lightning EMotors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and Lightning EMotors
The main advantage of trading using opposite Disney and Lightning EMotors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, Lightning EMotors 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 Lightning EMotors will offset losses from the drop in Lightning EMotors' long position.| Disney vs. Liberty Media | Disney vs. Atlanta Braves Holdings, | Disney vs. News Corp B | Disney vs. News Corp A |
| Lightning EMotors vs. American Premium Water | Lightning EMotors vs. Wabash National | Lightning EMotors vs. Titan International | Lightning EMotors 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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