Correlation Between Piaggio C and Xpeng
Can any of the company-specific risk be diversified away by investing in both Piaggio C and Xpeng 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 Piaggio C and Xpeng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Piaggio C SpA and Xpeng Inc, you can compare the effects of market volatilities on Piaggio C and Xpeng 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 Piaggio C with a short position of Xpeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Piaggio C and Xpeng.
Diversification Opportunities for Piaggio C and Xpeng
Excellent diversification
The 3 months correlation between Piaggio and Xpeng is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Piaggio C SpA and Xpeng Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xpeng Inc and Piaggio C 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 Piaggio C SpA are associated (or correlated) with Xpeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xpeng Inc has no effect on the direction of Piaggio C i.e., Piaggio C and Xpeng go up and down completely randomly.
Pair Corralation between Piaggio C and Xpeng
Assuming the 90 days horizon Piaggio C SpA is expected to generate 0.74 times more return on investment than Xpeng. However, Piaggio C SpA is 1.36 times less risky than Xpeng. It trades about -0.01 of its potential returns per unit of risk. Xpeng Inc is currently generating about -0.01 per unit of risk. If you would invest 274.00 in Piaggio C SpA on September 14, 2024 and sell it today you would lose (41.00) from holding Piaggio C SpA or give up 14.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 72.86% |
| Values | Daily Returns |
Piaggio C SpA vs. Xpeng Inc
Performance |
| Timeline |
| Piaggio C SpA |
| Xpeng Inc |
Piaggio C and Xpeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Piaggio C and Xpeng
The main advantage of trading using opposite Piaggio C and Xpeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Piaggio C position performs unexpectedly, Xpeng 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 Xpeng will offset losses from the drop in Xpeng's long position.The idea behind Piaggio C SpA and Xpeng Inc 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.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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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