Correlation Between Canoo and Ferrari NV
Can any of the company-specific risk be diversified away by investing in both Canoo and Ferrari NV 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 Ferrari NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canoo Inc and Ferrari NV, you can compare the effects of market volatilities on Canoo and Ferrari NV 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 Ferrari NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canoo and Ferrari NV.
Diversification Opportunities for Canoo and Ferrari NV
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canoo and Ferrari is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Canoo Inc and Ferrari NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferrari NV 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 Ferrari NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferrari NV has no effect on the direction of Canoo i.e., Canoo and Ferrari NV go up and down completely randomly.
Pair Corralation between Canoo and Ferrari NV
Given the investment horizon of 90 days Canoo Inc is expected to under-perform the Ferrari NV. In addition to that, Canoo is 4.85 times more volatile than Ferrari NV. It trades about -0.13 of its total potential returns per unit of risk. Ferrari NV is currently generating about 0.03 per unit of volatility. If you would invest 41,214 in Ferrari NV on August 24, 2024 and sell it today you would earn a total of 1,737 from holding Ferrari NV or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Canoo Inc vs. Ferrari NV
Performance |
| Timeline |
| Canoo Inc |
| Ferrari NV |
Canoo and Ferrari NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canoo and Ferrari NV
The main advantage of trading using opposite Canoo and Ferrari NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canoo position performs unexpectedly, Ferrari NV 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 Ferrari NV will offset losses from the drop in Ferrari NV's long position.| Canoo vs. Lucid Group | Canoo vs. Rivian Automotive | Canoo vs. Polestar Automotive Holding | Canoo vs. Mullen Automotive |
| Ferrari NV vs. Lucid Group | Ferrari NV vs. Rivian Automotive | Ferrari NV vs. Polestar Automotive Holding | Ferrari NV vs. Mullen Automotive |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Transaction History View history of all your transactions and understand their impact on performance |