Correlation Between Ehang Holdings and ParaZero Technologies
Can any of the company-specific risk be diversified away by investing in both Ehang Holdings and ParaZero Technologies 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 ParaZero Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ehang Holdings and ParaZero Technologies Ltd, you can compare the effects of market volatilities on Ehang Holdings and ParaZero Technologies 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 ParaZero Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ehang Holdings and ParaZero Technologies.
Diversification Opportunities for Ehang Holdings and ParaZero Technologies
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ehang and ParaZero is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ehang Holdings and ParaZero Technologies Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ParaZero Technologies 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 ParaZero Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ParaZero Technologies has no effect on the direction of Ehang Holdings i.e., Ehang Holdings and ParaZero Technologies go up and down completely randomly.
Pair Corralation between Ehang Holdings and ParaZero Technologies
Allowing for the 90-day total investment horizon Ehang Holdings is expected to generate 1.36 times less return on investment than ParaZero Technologies. But when comparing it to its historical volatility, Ehang Holdings is 2.4 times less risky than ParaZero Technologies. It trades about 0.06 of its potential returns per unit of risk. ParaZero Technologies Ltd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 360.00 in ParaZero Technologies Ltd on September 12, 2024 and sell it today you would lose (225.00) from holding ParaZero Technologies Ltd or give up 62.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 70.3% |
| Values | Daily Returns |
Ehang Holdings vs. ParaZero Technologies Ltd
Performance |
| Timeline |
| Ehang Holdings |
| ParaZero Technologies |
Ehang Holdings and ParaZero Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ehang Holdings and ParaZero Technologies
The main advantage of trading using opposite Ehang Holdings and ParaZero Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ehang Holdings position performs unexpectedly, ParaZero Technologies 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 ParaZero Technologies will offset losses from the drop in ParaZero Technologies' long position.| Ehang Holdings vs. Archer Aviation | Ehang Holdings vs. Vertical Aerospace | Ehang Holdings vs. Rocket Lab USA | Ehang Holdings vs. Lilium NV |
| ParaZero Technologies vs. The Boeing | ParaZero Technologies vs. Curtiss Wright | ParaZero Technologies vs. Ehang Holdings | ParaZero Technologies vs. General Dynamics |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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