Correlation Between Fisker and Polestar Automotive
Can any of the company-specific risk be diversified away by investing in both Fisker 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 Fisker and Polestar Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fisker Inc and Polestar Automotive Holding, you can compare the effects of market volatilities on Fisker 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 Fisker with a short position of Polestar Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisker and Polestar Automotive.
Diversification Opportunities for Fisker and Polestar Automotive
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fisker and Polestar is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Fisker Inc and Polestar Automotive Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polestar Automotive and Fisker 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 Fisker Inc 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 Fisker i.e., Fisker and Polestar Automotive go up and down completely randomly.
Pair Corralation between Fisker and Polestar Automotive
If you would invest 615.00 in Fisker Inc on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Fisker Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Fisker Inc vs. Polestar Automotive Holding
Performance |
| Timeline |
| Fisker Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Polestar Automotive |
Fisker and Polestar Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fisker and Polestar Automotive
The main advantage of trading using opposite Fisker and Polestar Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisker 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.The idea behind Fisker Inc and Polestar Automotive Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Polestar Automotive vs. Lucid Group | Polestar Automotive vs. Rivian Automotive | Polestar Automotive vs. Canoo Inc | Polestar Automotive vs. Nio Class A |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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