Correlation Between Canoo Holdings and Bonterra Resources
Can any of the company-specific risk be diversified away by investing in both Canoo Holdings and Bonterra Resources 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 Holdings and Bonterra Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canoo Holdings and Bonterra Resources, you can compare the effects of market volatilities on Canoo Holdings and Bonterra Resources 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 Holdings with a short position of Bonterra Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canoo Holdings and Bonterra Resources.
Diversification Opportunities for Canoo Holdings and Bonterra Resources
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canoo and Bonterra is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Canoo Holdings and Bonterra Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonterra Resources and Canoo Holdings 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 Holdings are associated (or correlated) with Bonterra Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonterra Resources has no effect on the direction of Canoo Holdings i.e., Canoo Holdings and Bonterra Resources go up and down completely randomly.
Pair Corralation between Canoo Holdings and Bonterra Resources
Assuming the 90 days horizon Canoo Holdings is expected to under-perform the Bonterra Resources. In addition to that, Canoo Holdings is 2.09 times more volatile than Bonterra Resources. It trades about -0.15 of its total potential returns per unit of risk. Bonterra Resources is currently generating about -0.11 per unit of volatility. If you would invest 20.00 in Bonterra Resources on August 30, 2024 and sell it today you would lose (3.00) from holding Bonterra Resources or give up 15.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Canoo Holdings vs. Bonterra Resources
Performance |
| Timeline |
| Canoo Holdings |
| Bonterra Resources |
Canoo Holdings and Bonterra Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canoo Holdings and Bonterra Resources
The main advantage of trading using opposite Canoo Holdings and Bonterra Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canoo Holdings position performs unexpectedly, Bonterra Resources 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 Bonterra Resources will offset losses from the drop in Bonterra Resources' long position.| Canoo Holdings vs. EVgo Equity Warrants | Canoo Holdings vs. Canoo Inc | Canoo Holdings vs. Paysafe Ltd Wt |
| Bonterra Resources vs. Gander Gold | Bonterra Resources vs. Sokoman Minerals Corp | Bonterra Resources vs. Labrador Gold Corp | Bonterra Resources vs. Precipitate Gold Corp |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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