Correlation Between Old Dominion and Electrovaya Common
Can any of the company-specific risk be diversified away by investing in both Old Dominion and Electrovaya Common 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 Old Dominion and Electrovaya Common into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Dominion Freight and Electrovaya Common Shares, you can compare the effects of market volatilities on Old Dominion and Electrovaya Common 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 Old Dominion with a short position of Electrovaya Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Dominion and Electrovaya Common.
Diversification Opportunities for Old Dominion and Electrovaya Common
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Old and Electrovaya is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Old Dominion Freight and Electrovaya Common Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrovaya Common Shares and Old Dominion 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 Old Dominion Freight are associated (or correlated) with Electrovaya Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrovaya Common Shares has no effect on the direction of Old Dominion i.e., Old Dominion and Electrovaya Common go up and down completely randomly.
Pair Corralation between Old Dominion and Electrovaya Common
Given the investment horizon of 90 days Old Dominion is expected to generate 2.22 times less return on investment than Electrovaya Common. But when comparing it to its historical volatility, Old Dominion Freight is 1.63 times less risky than Electrovaya Common. It trades about 0.2 of its potential returns per unit of risk. Electrovaya Common Shares is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 206.00 in Electrovaya Common Shares on September 2, 2024 and sell it today you would earn a total of 58.00 from holding Electrovaya Common Shares or generate 28.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Dominion Freight vs. Electrovaya Common Shares
Performance |
| Timeline |
| Old Dominion Freight |
| Electrovaya Common Shares |
Old Dominion and Electrovaya Common Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Dominion and Electrovaya Common
The main advantage of trading using opposite Old Dominion and Electrovaya Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Dominion position performs unexpectedly, Electrovaya Common 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 Electrovaya Common will offset losses from the drop in Electrovaya Common's long position.| Old Dominion vs. ArcBest Corp | Old Dominion vs. Marten Transport | Old Dominion vs. Werner Enterprises | Old Dominion vs. Knight Transportation |
| Electrovaya Common vs. Corporacion America Airports | Electrovaya Common vs. Air Lease | Electrovaya Common vs. Finnair Oyj | Electrovaya Common vs. Jacobs Solutions |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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