Correlation Between Oak Woods and EVe Mobility
Can any of the company-specific risk be diversified away by investing in both Oak Woods and EVe Mobility 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 Oak Woods and EVe Mobility into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oak Woods Acquisition and EVe Mobility Acquisition, you can compare the effects of market volatilities on Oak Woods and EVe Mobility 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 Oak Woods with a short position of EVe Mobility. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oak Woods and EVe Mobility.
Diversification Opportunities for Oak Woods and EVe Mobility
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oak and EVe is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Oak Woods Acquisition and EVe Mobility Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVe Mobility Acquisition and Oak Woods 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 Oak Woods Acquisition are associated (or correlated) with EVe Mobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVe Mobility Acquisition has no effect on the direction of Oak Woods i.e., Oak Woods and EVe Mobility go up and down completely randomly.
Pair Corralation between Oak Woods and EVe Mobility
Assuming the 90 days horizon Oak Woods Acquisition is expected to generate 7.52 times more return on investment than EVe Mobility. However, Oak Woods is 7.52 times more volatile than EVe Mobility Acquisition. It trades about 0.04 of its potential returns per unit of risk. EVe Mobility Acquisition is currently generating about 0.14 per unit of risk. If you would invest 1,138 in Oak Woods Acquisition on August 30, 2024 and sell it today you would earn a total of 12.00 from holding Oak Woods Acquisition or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Oak Woods Acquisition vs. EVe Mobility Acquisition
Performance |
| Timeline |
| Oak Woods Acquisition |
| EVe Mobility Acquisition |
Oak Woods and EVe Mobility Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oak Woods and EVe Mobility
The main advantage of trading using opposite Oak Woods and EVe Mobility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oak Woods position performs unexpectedly, EVe Mobility 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 EVe Mobility will offset losses from the drop in EVe Mobility's long position.The idea behind Oak Woods Acquisition and EVe Mobility Acquisition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| EVe Mobility vs. Pyrophyte Acquisition Corp | EVe Mobility vs. Cartesian Growth | EVe Mobility vs. Oak Woods Acquisition |
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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