Correlation Between Ehang Holdings and Union Pacific
Can any of the company-specific risk be diversified away by investing in both Ehang Holdings and Union Pacific 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 Union Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ehang Holdings and Union Pacific, you can compare the effects of market volatilities on Ehang Holdings and Union Pacific 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 Union Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ehang Holdings and Union Pacific.
Diversification Opportunities for Ehang Holdings and Union Pacific
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ehang and Union is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ehang Holdings and Union Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Pacific 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 Union Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Pacific has no effect on the direction of Ehang Holdings i.e., Ehang Holdings and Union Pacific go up and down completely randomly.
Pair Corralation between Ehang Holdings and Union Pacific
Allowing for the 90-day total investment horizon Ehang Holdings is expected to generate 4.5 times more return on investment than Union Pacific. However, Ehang Holdings is 4.5 times more volatile than Union Pacific. It trades about 0.05 of its potential returns per unit of risk. Union Pacific is currently generating about 0.0 per unit of risk. If you would invest 1,435 in Ehang Holdings on August 28, 2024 and sell it today you would earn a total of 90.00 from holding Ehang Holdings or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ehang Holdings vs. Union Pacific
Performance |
| Timeline |
| Ehang Holdings |
| Union Pacific |
Ehang Holdings and Union Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ehang Holdings and Union Pacific
The main advantage of trading using opposite Ehang Holdings and Union Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ehang Holdings position performs unexpectedly, Union Pacific 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 Union Pacific will offset losses from the drop in Union Pacific's long position.| Ehang Holdings vs. Redwire Corp | Ehang Holdings vs. Sidus Space | Ehang Holdings vs. Rocket Lab USA | Ehang Holdings vs. Momentus |
| Union Pacific vs. Norfolk Southern | Union Pacific vs. CSX Corporation | Union Pacific vs. United Parcel Service | Union Pacific vs. Canadian National Railway |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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