Correlation Between Canoo Holdings and Erdene Resource
Can any of the company-specific risk be diversified away by investing in both Canoo Holdings and Erdene Resource 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 Erdene Resource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canoo Holdings and Erdene Resource Development, you can compare the effects of market volatilities on Canoo Holdings and Erdene Resource 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 Erdene Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canoo Holdings and Erdene Resource.
Diversification Opportunities for Canoo Holdings and Erdene Resource
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canoo and Erdene is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Canoo Holdings and Erdene Resource Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erdene Resource Deve 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 Erdene Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erdene Resource Deve has no effect on the direction of Canoo Holdings i.e., Canoo Holdings and Erdene Resource go up and down completely randomly.
Pair Corralation between Canoo Holdings and Erdene Resource
Assuming the 90 days horizon Canoo Holdings is expected to under-perform the Erdene Resource. In addition to that, Canoo Holdings is 3.3 times more volatile than Erdene Resource Development. It trades about -0.2 of its total potential returns per unit of risk. Erdene Resource Development is currently generating about -0.16 per unit of volatility. If you would invest 49.00 in Erdene Resource Development on September 1, 2024 and sell it today you would lose (6.00) from holding Erdene Resource Development or give up 12.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canoo Holdings vs. Erdene Resource Development
Performance |
| Timeline |
| Canoo Holdings |
| Erdene Resource Deve |
Canoo Holdings and Erdene Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canoo Holdings and Erdene Resource
The main advantage of trading using opposite Canoo Holdings and Erdene Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canoo Holdings position performs unexpectedly, Erdene Resource 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 Erdene Resource will offset losses from the drop in Erdene Resource's long position.| Canoo Holdings vs. EVgo Equity Warrants | Canoo Holdings vs. Canoo Inc | Canoo Holdings vs. Paysafe Ltd Wt |
| Erdene Resource vs. South32 Limited | Erdene Resource vs. NioCorp Developments Ltd | Erdene Resource vs. HUMANA INC | Erdene Resource vs. SCOR PK |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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