Correlation Between Canoo Holdings and Sienna Resources
Can any of the company-specific risk be diversified away by investing in both Canoo Holdings and Sienna 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 Sienna 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 Sienna Resources, you can compare the effects of market volatilities on Canoo Holdings and Sienna 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 Sienna Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canoo Holdings and Sienna Resources.
Diversification Opportunities for Canoo Holdings and Sienna Resources
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canoo and Sienna is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Canoo Holdings and Sienna Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sienna 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 Sienna Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sienna Resources has no effect on the direction of Canoo Holdings i.e., Canoo Holdings and Sienna Resources go up and down completely randomly.
Pair Corralation between Canoo Holdings and Sienna Resources
Assuming the 90 days horizon Canoo Holdings is expected to under-perform the Sienna Resources. In addition to that, Canoo Holdings is 2.33 times more volatile than Sienna Resources. It trades about -0.15 of its total potential returns per unit of risk. Sienna Resources is currently generating about -0.04 per unit of volatility. If you would invest 2.36 in Sienna Resources on August 30, 2024 and sell it today you would lose (0.16) from holding Sienna Resources or give up 6.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canoo Holdings vs. Sienna Resources
Performance |
| Timeline |
| Canoo Holdings |
| Sienna Resources |
Canoo Holdings and Sienna Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canoo Holdings and Sienna Resources
The main advantage of trading using opposite Canoo Holdings and Sienna Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canoo Holdings position performs unexpectedly, Sienna 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 Sienna Resources will offset losses from the drop in Sienna Resources' long position.| Canoo Holdings vs. EVgo Equity Warrants | Canoo Holdings vs. Canoo Inc | Canoo Holdings vs. Paysafe Ltd Wt |
| Sienna Resources vs. Norra Metals Corp | Sienna Resources vs. E79 Resources Corp | Sienna Resources vs. Voltage Metals Corp | Sienna Resources vs. Cantex Mine Development |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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