Correlation Between Kandi Technologies and Westport Fuel
Can any of the company-specific risk be diversified away by investing in both Kandi Technologies and Westport Fuel 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 Kandi Technologies and Westport Fuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kandi Technologies Group and Westport Fuel Systems, you can compare the effects of market volatilities on Kandi Technologies and Westport Fuel 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 Kandi Technologies with a short position of Westport Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kandi Technologies and Westport Fuel.
Diversification Opportunities for Kandi Technologies and Westport Fuel
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kandi and Westport is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Kandi Technologies Group and Westport Fuel Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westport Fuel Systems and Kandi Technologies 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 Kandi Technologies Group are associated (or correlated) with Westport Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westport Fuel Systems has no effect on the direction of Kandi Technologies i.e., Kandi Technologies and Westport Fuel go up and down completely randomly.
Pair Corralation between Kandi Technologies and Westport Fuel
Given the investment horizon of 90 days Kandi Technologies Group is expected to under-perform the Westport Fuel. In addition to that, Kandi Technologies is 1.87 times more volatile than Westport Fuel Systems. It trades about -0.05 of its total potential returns per unit of risk. Westport Fuel Systems is currently generating about -0.07 per unit of volatility. If you would invest 444.00 in Westport Fuel Systems on October 20, 2024 and sell it today you would lose (62.00) from holding Westport Fuel Systems or give up 13.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kandi Technologies Group vs. Westport Fuel Systems
Performance |
| Timeline |
| Kandi Technologies |
| Westport Fuel Systems |
Kandi Technologies and Westport Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kandi Technologies and Westport Fuel
The main advantage of trading using opposite Kandi Technologies and Westport Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kandi Technologies position performs unexpectedly, Westport Fuel 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 Westport Fuel will offset losses from the drop in Westport Fuel's long position.| Kandi Technologies vs. Hyliion Holdings Corp | Kandi Technologies vs. Foresight Autonomous Holdings | Kandi Technologies vs. Aeva Technologies | Kandi Technologies vs. Aeye Inc |
| Westport Fuel vs. Foresight Autonomous Holdings | Westport Fuel vs. Hyliion Holdings Corp | Westport Fuel vs. American Axle Manufacturing | Westport Fuel vs. Gentex |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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