Correlation Between Foresight Autonomous and Lotus Technology
Can any of the company-specific risk be diversified away by investing in both Foresight Autonomous 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 Foresight Autonomous and Lotus Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foresight Autonomous Holdings and Lotus Technology American, you can compare the effects of market volatilities on Foresight Autonomous 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 Foresight Autonomous with a short position of Lotus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foresight Autonomous and Lotus Technology.
Diversification Opportunities for Foresight Autonomous and Lotus Technology
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Foresight and Lotus is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Foresight Autonomous Holdings 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 Foresight Autonomous 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 Foresight Autonomous Holdings 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 Foresight Autonomous i.e., Foresight Autonomous and Lotus Technology go up and down completely randomly.
Pair Corralation between Foresight Autonomous and Lotus Technology
Given the investment horizon of 90 days Foresight Autonomous Holdings is expected to generate 1.51 times more return on investment than Lotus Technology. However, Foresight Autonomous is 1.51 times more volatile than Lotus Technology American. It trades about -0.04 of its potential returns per unit of risk. Lotus Technology American is currently generating about -0.11 per unit of risk. If you would invest 67.00 in Foresight Autonomous Holdings on August 30, 2024 and sell it today you would lose (3.00) from holding Foresight Autonomous Holdings or give up 4.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Foresight Autonomous Holdings vs. Lotus Technology American
Performance |
| Timeline |
| Foresight Autonomous |
| Lotus Technology American |
Foresight Autonomous and Lotus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foresight Autonomous and Lotus Technology
The main advantage of trading using opposite Foresight Autonomous and Lotus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foresight Autonomous 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.| Foresight Autonomous vs. Ford Motor | Foresight Autonomous vs. General Motors | Foresight Autonomous vs. Goodyear Tire Rubber | Foresight Autonomous vs. Li Auto |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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