Correlation Between ECARX Holdings and Johnson Electric
Can any of the company-specific risk be diversified away by investing in both ECARX Holdings and Johnson 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 ECARX Holdings and Johnson Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECARX Holdings Class and Johnson Electric Holdings, you can compare the effects of market volatilities on ECARX Holdings and Johnson 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 ECARX Holdings with a short position of Johnson Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECARX Holdings and Johnson Electric.
Diversification Opportunities for ECARX Holdings and Johnson Electric
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ECARX and Johnson is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding ECARX Holdings Class and Johnson Electric Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Electric Holdings and ECARX Holdings 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 ECARX Holdings Class are associated (or correlated) with Johnson Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Electric Holdings has no effect on the direction of ECARX Holdings i.e., ECARX Holdings and Johnson Electric go up and down completely randomly.
Pair Corralation between ECARX Holdings and Johnson Electric
Considering the 90-day investment horizon ECARX Holdings Class is expected to under-perform the Johnson Electric. In addition to that, ECARX Holdings is 2.22 times more volatile than Johnson Electric Holdings. It trades about -0.02 of its total potential returns per unit of risk. Johnson Electric Holdings is currently generating about 0.03 per unit of volatility. If you would invest 131.00 in Johnson Electric Holdings on September 12, 2024 and sell it today you would earn a total of 9.00 from holding Johnson Electric Holdings or generate 6.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 56.19% |
| Values | Daily Returns |
ECARX Holdings Class vs. Johnson Electric Holdings
Performance |
| Timeline |
| ECARX Holdings Class |
| Johnson Electric Holdings |
ECARX Holdings and Johnson Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECARX Holdings and Johnson Electric
The main advantage of trading using opposite ECARX Holdings and Johnson Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECARX Holdings position performs unexpectedly, Johnson 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 Johnson Electric will offset losses from the drop in Johnson Electric's long position.| ECARX Holdings vs. Dorman Products | ECARX Holdings vs. Monro Muffler Brake | ECARX Holdings vs. Standard Motor Products | ECARX Holdings vs. Stoneridge |
| Johnson Electric vs. Aeye Inc | Johnson Electric vs. ECARX Holdings Class | Johnson Electric vs. SES AI Corp | Johnson Electric vs. Hyliion Holdings Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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