Correlation Between Smart Share and Lotus Technology
Can any of the company-specific risk be diversified away by investing in both Smart Share and Lotus Technology 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 Smart Share and Lotus Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smart Share Global and Lotus Technology American, you can compare the effects of market volatilities on Smart Share and Lotus Technology 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 Smart Share with a short position of Lotus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smart Share and Lotus Technology.
Diversification Opportunities for Smart Share and Lotus Technology
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Smart and Lotus is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Smart Share Global and Lotus Technology American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Technology American and Smart Share 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 Smart Share Global are associated (or correlated) with Lotus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Technology American has no effect on the direction of Smart Share i.e., Smart Share and Lotus Technology go up and down completely randomly.
Pair Corralation between Smart Share and Lotus Technology
Allowing for the 90-day total investment horizon Smart Share Global is expected to generate 1.13 times more return on investment than Lotus Technology. However, Smart Share is 1.13 times more volatile than Lotus Technology American. It trades about 0.01 of its potential returns per unit of risk. Lotus Technology American is currently generating about -0.02 per unit of risk. If you would invest 106.00 in Smart Share Global on August 30, 2024 and sell it today you would lose (34.00) from holding Smart Share Global or give up 32.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smart Share Global vs. Lotus Technology American
Performance |
| Timeline |
| Smart Share Global |
| Lotus Technology American |
Smart Share and Lotus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smart Share and Lotus Technology
The main advantage of trading using opposite Smart Share and Lotus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smart Share position performs unexpectedly, Lotus Technology 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 Lotus Technology will offset losses from the drop in Lotus Technology's long position.| Smart Share vs. Frontdoor | Smart Share vs. Bright Horizons Family | Smart Share vs. Mister Car Wash | Smart Share vs. Carriage Services |
| Lotus Technology vs. Evolution Gaming Group | Lotus Technology vs. Playstudios | Lotus Technology vs. GameStop Corp | Lotus Technology vs. Senmiao Technology |
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.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |