Correlation Between Microvast Holdings and Xos Equity
Can any of the company-specific risk be diversified away by investing in both Microvast Holdings and Xos Equity 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 Microvast Holdings and Xos Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microvast Holdings and Xos Equity Warrants, you can compare the effects of market volatilities on Microvast Holdings and Xos Equity 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 Microvast Holdings with a short position of Xos Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microvast Holdings and Xos Equity.
Diversification Opportunities for Microvast Holdings and Xos Equity
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microvast and Xos is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Microvast Holdings and Xos Equity Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xos Equity Warrants and Microvast 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 Microvast Holdings are associated (or correlated) with Xos Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xos Equity Warrants has no effect on the direction of Microvast Holdings i.e., Microvast Holdings and Xos Equity go up and down completely randomly.
Pair Corralation between Microvast Holdings and Xos Equity
Assuming the 90 days horizon Microvast Holdings is expected to under-perform the Xos Equity. But the stock apears to be less risky and, when comparing its historical volatility, Microvast Holdings is 1.09 times less risky than Xos Equity. The stock trades about -0.08 of its potential returns per unit of risk. The Xos Equity Warrants is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.91 in Xos Equity Warrants on November 8, 2024 and sell it today you would earn a total of 0.09 from holding Xos Equity Warrants or generate 9.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Microvast Holdings vs. Xos Equity Warrants
Performance |
| Timeline |
| Microvast Holdings |
| Xos Equity Warrants |
Microvast Holdings and Xos Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microvast Holdings and Xos Equity
The main advantage of trading using opposite Microvast Holdings and Xos Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microvast Holdings position performs unexpectedly, Xos Equity 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 Xos Equity will offset losses from the drop in Xos Equity's long position.| Microvast Holdings vs. Microvast Holdings | Microvast Holdings vs. EVgo Equity Warrants | Microvast Holdings vs. Paysafe Ltd Wt | Microvast Holdings vs. Faraday Future Intelligent |
| Xos Equity vs. Microvast Holdings | Xos Equity vs. EVgo Equity Warrants | Xos Equity vs. Faraday Future Intelligent | Xos Equity vs. Xos Inc |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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