Correlation Between Ehang Holdings and Legato Merger
Can any of the company-specific risk be diversified away by investing in both Ehang Holdings and Legato Merger 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 Ehang Holdings and Legato Merger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ehang Holdings and Legato Merger II, you can compare the effects of market volatilities on Ehang Holdings and Legato Merger 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 Ehang Holdings with a short position of Legato Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ehang Holdings and Legato Merger.
Diversification Opportunities for Ehang Holdings and Legato Merger
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ehang and Legato is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ehang Holdings and Legato Merger II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legato Merger II and Ehang 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 Ehang Holdings are associated (or correlated) with Legato Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legato Merger II has no effect on the direction of Ehang Holdings i.e., Ehang Holdings and Legato Merger go up and down completely randomly.
Pair Corralation between Ehang Holdings and Legato Merger
Allowing for the 90-day total investment horizon Ehang Holdings is expected to under-perform the Legato Merger. But the stock apears to be less risky and, when comparing its historical volatility, Ehang Holdings is 1.55 times less risky than Legato Merger. The stock trades about -0.05 of its potential returns per unit of risk. The Legato Merger II is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 284.00 in Legato Merger II on September 2, 2024 and sell it today you would earn a total of 44.00 from holding Legato Merger II or generate 15.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ehang Holdings vs. Legato Merger II
Performance |
| Timeline |
| Ehang Holdings |
| Legato Merger II |
Ehang Holdings and Legato Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ehang Holdings and Legato Merger
The main advantage of trading using opposite Ehang Holdings and Legato Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ehang Holdings position performs unexpectedly, Legato Merger 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 Legato Merger will offset losses from the drop in Legato Merger's long position.| Ehang Holdings vs. Archer Aviation | Ehang Holdings vs. Rocket Lab USA | Ehang Holdings vs. Lilium NV | Ehang Holdings vs. HEICO |
| Legato Merger vs. Vita Coco | Legato Merger vs. Naked Wines plc | Legato Merger vs. Constellation Brands Class | Legato Merger vs. Willamette Valley Vineyards |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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