Correlation Between Electric Last and Polestar Automotive
Can any of the company-specific risk be diversified away by investing in both Electric Last and Polestar Automotive 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 Electric Last and Polestar Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electric Last Mile and Polestar Automotive Holding, you can compare the effects of market volatilities on Electric Last and Polestar Automotive 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 Electric Last with a short position of Polestar Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electric Last and Polestar Automotive.
Diversification Opportunities for Electric Last and Polestar Automotive
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Electric and Polestar is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Electric Last Mile and Polestar Automotive Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polestar Automotive and Electric Last 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 Electric Last Mile are associated (or correlated) with Polestar Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polestar Automotive has no effect on the direction of Electric Last i.e., Electric Last and Polestar Automotive go up and down completely randomly.
Pair Corralation between Electric Last and Polestar Automotive
If you would invest 23.00 in Polestar Automotive Holding on September 2, 2024 and sell it today you would lose (8.00) from holding Polestar Automotive Holding or give up 34.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
Electric Last Mile vs. Polestar Automotive Holding
Performance |
| Timeline |
| Electric Last Mile |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Polestar Automotive |
Electric Last and Polestar Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electric Last and Polestar Automotive
The main advantage of trading using opposite Electric Last and Polestar Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electric Last position performs unexpectedly, Polestar Automotive 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 Polestar Automotive will offset losses from the drop in Polestar Automotive's long position.| Electric Last vs. Faraday Future Intelligent | Electric Last vs. HYZON Motors | Electric Last vs. TMC the metals | Electric Last vs. Cardiff Lexington Corp |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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