Correlation Between ECARX Holdings and Dorman Products
Can any of the company-specific risk be diversified away by investing in both ECARX Holdings and Dorman Products 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 Dorman Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECARX Holdings Warrants and Dorman Products, you can compare the effects of market volatilities on ECARX Holdings and Dorman Products 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 Dorman Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECARX Holdings and Dorman Products.
Diversification Opportunities for ECARX Holdings and Dorman Products
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between ECARX and Dorman is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding ECARX Holdings Warrants and Dorman Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dorman Products 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 Warrants are associated (or correlated) with Dorman Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dorman Products has no effect on the direction of ECARX Holdings i.e., ECARX Holdings and Dorman Products go up and down completely randomly.
Pair Corralation between ECARX Holdings and Dorman Products
Assuming the 90 days horizon ECARX Holdings Warrants is expected to generate 54.46 times more return on investment than Dorman Products. However, ECARX Holdings is 54.46 times more volatile than Dorman Products. It trades about 0.11 of its potential returns per unit of risk. Dorman Products is currently generating about 0.07 per unit of risk. If you would invest 8.16 in ECARX Holdings Warrants on September 2, 2024 and sell it today you would lose (5.67) from holding ECARX Holdings Warrants or give up 69.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.56% |
| Values | Daily Returns |
ECARX Holdings Warrants vs. Dorman Products
Performance |
| Timeline |
| ECARX Holdings Warrants |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Dorman Products |
ECARX Holdings and Dorman Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECARX Holdings and Dorman Products
The main advantage of trading using opposite ECARX Holdings and Dorman Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECARX Holdings position performs unexpectedly, Dorman Products 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 Dorman Products will offset losses from the drop in Dorman Products' long position.| ECARX Holdings vs. ECARX Holdings Class | ECARX Holdings vs. Bridger Aerospace Group | ECARX Holdings vs. NewAmsterdam Pharma | ECARX Holdings vs. Gorilla Technology Group |
| Dorman Products vs. Standard Motor Products | Dorman Products vs. Motorcar Parts of | Dorman Products vs. Douglas Dynamics | Dorman Products vs. Stoneridge |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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