Correlation Between Canoo Holdings and Cascades
Can any of the company-specific risk be diversified away by investing in both Canoo Holdings and Cascades 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 Cascades into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canoo Holdings and Cascades, you can compare the effects of market volatilities on Canoo Holdings and Cascades 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 Cascades. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canoo Holdings and Cascades.
Diversification Opportunities for Canoo Holdings and Cascades
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Canoo and Cascades is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Canoo Holdings and Cascades in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cascades 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 Cascades. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cascades has no effect on the direction of Canoo Holdings i.e., Canoo Holdings and Cascades go up and down completely randomly.
Pair Corralation between Canoo Holdings and Cascades
Assuming the 90 days horizon Canoo Holdings is expected to generate 3.67 times more return on investment than Cascades. However, Canoo Holdings is 3.67 times more volatile than Cascades. It trades about 0.01 of its potential returns per unit of risk. Cascades is currently generating about 0.01 per unit of risk. If you would invest 6.35 in Canoo Holdings on September 3, 2024 and sell it today you would lose (4.05) from holding Canoo Holdings or give up 63.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 78.54% |
| Values | Daily Returns |
Canoo Holdings vs. Cascades
Performance |
| Timeline |
| Canoo Holdings |
| Cascades |
Canoo Holdings and Cascades Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canoo Holdings and Cascades
The main advantage of trading using opposite Canoo Holdings and Cascades positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canoo Holdings position performs unexpectedly, Cascades 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 Cascades will offset losses from the drop in Cascades' long position.| Canoo Holdings vs. EVgo Equity Warrants | Canoo Holdings vs. Canoo Inc | Canoo Holdings vs. Paysafe Ltd Wt |
| Cascades vs. TriMas | Cascades vs. Myers Industries | Cascades vs. Reynolds Consumer Products | Cascades vs. Pactiv Evergreen |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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