Correlation Between ECD Automotive and LOBO EV
Can any of the company-specific risk be diversified away by investing in both ECD Automotive and LOBO EV 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 ECD Automotive and LOBO EV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECD Automotive Design and LOBO EV TECHNOLOGIES, you can compare the effects of market volatilities on ECD Automotive and LOBO EV 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 ECD Automotive with a short position of LOBO EV. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECD Automotive and LOBO EV.
Diversification Opportunities for ECD Automotive and LOBO EV
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ECD and LOBO is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding ECD Automotive Design and LOBO EV TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOBO EV TECHNOLOGIES and ECD Automotive 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 ECD Automotive Design are associated (or correlated) with LOBO EV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOBO EV TECHNOLOGIES has no effect on the direction of ECD Automotive i.e., ECD Automotive and LOBO EV go up and down completely randomly.
Pair Corralation between ECD Automotive and LOBO EV
Given the investment horizon of 90 days ECD Automotive Design is expected to generate 0.76 times more return on investment than LOBO EV. However, ECD Automotive Design is 1.31 times less risky than LOBO EV. It trades about -0.05 of its potential returns per unit of risk. LOBO EV TECHNOLOGIES is currently generating about -0.04 per unit of risk. If you would invest 105.00 in ECD Automotive Design on August 30, 2024 and sell it today you would lose (8.00) from holding ECD Automotive Design or give up 7.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECD Automotive Design vs. LOBO EV TECHNOLOGIES
Performance |
| Timeline |
| ECD Automotive Design |
| LOBO EV TECHNOLOGIES |
ECD Automotive and LOBO EV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECD Automotive and LOBO EV
The main advantage of trading using opposite ECD Automotive and LOBO EV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECD Automotive position performs unexpectedly, LOBO EV 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 LOBO EV will offset losses from the drop in LOBO EV's long position.| ECD Automotive vs. Ford Motor | ECD Automotive vs. General Motors | ECD Automotive vs. Goodyear Tire Rubber | ECD Automotive vs. Li Auto |
| LOBO EV vs. Aldel Financial II | LOBO EV vs. Western Acquisition Ventures | LOBO EV vs. Capital Clean Energy | LOBO EV vs. NetEase |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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