Correlation Between Quantumscape Corp and ECARX Holdings
Can any of the company-specific risk be diversified away by investing in both Quantumscape Corp and ECARX 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 Quantumscape Corp and ECARX Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quantumscape Corp and ECARX Holdings Class, you can compare the effects of market volatilities on Quantumscape Corp and ECARX 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 Quantumscape Corp with a short position of ECARX Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantumscape Corp and ECARX Holdings.
Diversification Opportunities for Quantumscape Corp and ECARX Holdings
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Quantumscape and ECARX is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Quantumscape Corp and ECARX Holdings Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECARX Holdings Class and Quantumscape Corp 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 Quantumscape Corp are associated (or correlated) with ECARX Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECARX Holdings Class has no effect on the direction of Quantumscape Corp i.e., Quantumscape Corp and ECARX Holdings go up and down completely randomly.
Pair Corralation between Quantumscape Corp and ECARX Holdings
Allowing for the 90-day total investment horizon Quantumscape Corp is expected to generate 119.29 times less return on investment than ECARX Holdings. But when comparing it to its historical volatility, Quantumscape Corp is 1.06 times less risky than ECARX Holdings. It trades about 0.0 of its potential returns per unit of risk. ECARX Holdings Class is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 116.00 in ECARX Holdings Class on August 23, 2024 and sell it today you would earn a total of 49.00 from holding ECARX Holdings Class or generate 42.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quantumscape Corp vs. ECARX Holdings Class
Performance |
| Timeline |
| Quantumscape Corp |
| ECARX Holdings Class |
Quantumscape Corp and ECARX Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quantumscape Corp and ECARX Holdings
The main advantage of trading using opposite Quantumscape Corp and ECARX Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantumscape Corp position performs unexpectedly, ECARX 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 ECARX Holdings will offset losses from the drop in ECARX Holdings' long position.| Quantumscape Corp vs. Mobileye Global Class | Quantumscape Corp vs. Innoviz Technologies | Quantumscape Corp vs. Aeva Technologies | Quantumscape Corp vs. Hyliion Holdings Corp |
| ECARX Holdings vs. Dorman Products | ECARX Holdings vs. Monro Muffler Brake | ECARX Holdings vs. Standard Motor Products | ECARX Holdings vs. Stoneridge |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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