Correlation Between Lotus Technology and Canoo Holdings
Can any of the company-specific risk be diversified away by investing in both Lotus Technology and Canoo Holdings 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 Lotus Technology and Canoo Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotus Technology Warrants and Canoo Holdings, you can compare the effects of market volatilities on Lotus Technology and Canoo Holdings 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 Lotus Technology with a short position of Canoo Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotus Technology and Canoo Holdings.
Diversification Opportunities for Lotus Technology and Canoo Holdings
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lotus and Canoo is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lotus Technology Warrants and Canoo Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canoo Holdings and Lotus Technology 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 Lotus Technology Warrants are associated (or correlated) with Canoo Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canoo Holdings has no effect on the direction of Lotus Technology i.e., Lotus Technology and Canoo Holdings go up and down completely randomly.
Pair Corralation between Lotus Technology and Canoo Holdings
Assuming the 90 days horizon Lotus Technology Warrants is expected to generate 0.74 times more return on investment than Canoo Holdings. However, Lotus Technology Warrants is 1.34 times less risky than Canoo Holdings. It trades about 0.04 of its potential returns per unit of risk. Canoo Holdings is currently generating about -0.14 per unit of risk. If you would invest 27.00 in Lotus Technology Warrants on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Lotus Technology Warrants or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 68.18% |
| Values | Daily Returns |
Lotus Technology Warrants vs. Canoo Holdings
Performance |
| Timeline |
| Lotus Technology Warrants |
| Canoo Holdings |
Lotus Technology and Canoo Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotus Technology and Canoo Holdings
The main advantage of trading using opposite Lotus Technology and Canoo Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotus Technology position performs unexpectedly, Canoo Holdings 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 Canoo Holdings will offset losses from the drop in Canoo Holdings' long position.| Lotus Technology vs. Barrick Gold Corp | Lotus Technology vs. Xponential Fitness | Lotus Technology vs. RadNet Inc | Lotus Technology vs. Neogen |
| Canoo Holdings vs. EVgo Equity Warrants | Canoo Holdings vs. Canoo Inc | Canoo Holdings vs. Paysafe Ltd Wt |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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