Correlation Between ECARX Holdings and Compagnie Generale
Can any of the company-specific risk be diversified away by investing in both ECARX Holdings and Compagnie Generale 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 Compagnie Generale 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 Compagnie Generale des, you can compare the effects of market volatilities on ECARX Holdings and Compagnie Generale 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 Compagnie Generale. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECARX Holdings and Compagnie Generale.
Diversification Opportunities for ECARX Holdings and Compagnie Generale
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ECARX and Compagnie is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding ECARX Holdings Warrants and Compagnie Generale des in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Generale des 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 Compagnie Generale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Generale des has no effect on the direction of ECARX Holdings i.e., ECARX Holdings and Compagnie Generale go up and down completely randomly.
Pair Corralation between ECARX Holdings and Compagnie Generale
Assuming the 90 days horizon ECARX Holdings Warrants is expected to generate 13.01 times more return on investment than Compagnie Generale. However, ECARX Holdings is 13.01 times more volatile than Compagnie Generale des. It trades about 0.52 of its potential returns per unit of risk. Compagnie Generale des is currently generating about -0.12 per unit of risk. If you would invest 1.55 in ECARX Holdings Warrants on August 26, 2024 and sell it today you would earn a total of 0.94 from holding ECARX Holdings Warrants or generate 60.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 31.82% |
| Values | Daily Returns |
ECARX Holdings Warrants vs. Compagnie Generale des
Performance |
| Timeline |
| ECARX Holdings Warrants |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Compagnie Generale des |
ECARX Holdings and Compagnie Generale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECARX Holdings and Compagnie Generale
The main advantage of trading using opposite ECARX Holdings and Compagnie Generale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECARX Holdings position performs unexpectedly, Compagnie Generale 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 Compagnie Generale will offset losses from the drop in Compagnie Generale's long position.The idea behind ECARX Holdings Warrants and Compagnie Generale des pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Compagnie Generale vs. Allison Transmission Holdings | Compagnie Generale vs. Luminar Technologies | Compagnie Generale vs. Lear Corporation | Compagnie Generale vs. BorgWarner |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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