Correlation Between Canoo Holdings and Vendetta Mining
Can any of the company-specific risk be diversified away by investing in both Canoo Holdings and Vendetta Mining 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 Vendetta Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canoo Holdings and Vendetta Mining Corp, you can compare the effects of market volatilities on Canoo Holdings and Vendetta Mining 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 Vendetta Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canoo Holdings and Vendetta Mining.
Diversification Opportunities for Canoo Holdings and Vendetta Mining
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canoo and Vendetta is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Canoo Holdings and Vendetta Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vendetta Mining Corp 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 Vendetta Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vendetta Mining Corp has no effect on the direction of Canoo Holdings i.e., Canoo Holdings and Vendetta Mining go up and down completely randomly.
Pair Corralation between Canoo Holdings and Vendetta Mining
Assuming the 90 days horizon Canoo Holdings is expected to under-perform the Vendetta Mining. But the stock apears to be less risky and, when comparing its historical volatility, Canoo Holdings is 7.12 times less risky than Vendetta Mining. The stock trades about -0.1 of its potential returns per unit of risk. The Vendetta Mining Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.12 in Vendetta Mining Corp on August 31, 2024 and sell it today you would earn a total of 0.64 from holding Vendetta Mining Corp or generate 533.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canoo Holdings vs. Vendetta Mining Corp
Performance |
| Timeline |
| Canoo Holdings |
| Vendetta Mining Corp |
Canoo Holdings and Vendetta Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canoo Holdings and Vendetta Mining
The main advantage of trading using opposite Canoo Holdings and Vendetta Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canoo Holdings position performs unexpectedly, Vendetta Mining 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 Vendetta Mining will offset losses from the drop in Vendetta Mining's long position.| Canoo Holdings vs. EVgo Equity Warrants | Canoo Holdings vs. Canoo Inc | Canoo Holdings vs. Paysafe Ltd Wt |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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