Correlation Between Canoo and Polestar Automotive
Can any of the company-specific risk be diversified away by investing in both Canoo 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 Canoo and Polestar Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canoo Inc and Polestar Automotive Holding, you can compare the effects of market volatilities on Canoo 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 Canoo with a short position of Polestar Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canoo and Polestar Automotive.
Diversification Opportunities for Canoo and Polestar Automotive
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Canoo and Polestar is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Canoo 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 Canoo 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 Canoo 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 Canoo i.e., Canoo and Polestar Automotive go up and down completely randomly.
Pair Corralation between Canoo and Polestar Automotive
Given the investment horizon of 90 days Canoo Inc is expected to under-perform the Polestar Automotive. In addition to that, Canoo is 4.64 times more volatile than Polestar Automotive Holding. It trades about -0.14 of its total potential returns per unit of risk. Polestar Automotive Holding is currently generating about -0.04 per unit of volatility. If you would invest 110.00 in Polestar Automotive Holding on November 2, 2024 and sell it today you would lose (6.00) from holding Polestar Automotive Holding or give up 5.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canoo Inc vs. Polestar Automotive Holding
Performance |
| Timeline |
| Canoo Inc |
| Polestar Automotive |
Canoo and Polestar Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canoo and Polestar Automotive
The main advantage of trading using opposite Canoo and Polestar Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canoo 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.| Canoo vs. Lucid Group | Canoo vs. Rivian Automotive | Canoo vs. Polestar Automotive Holding | Canoo vs. Mullen Automotive |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |