Correlation Between Ferrari NV and Electrameccanica
Can any of the company-specific risk be diversified away by investing in both Ferrari NV and Electrameccanica 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 Ferrari NV and Electrameccanica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferrari NV and Electrameccanica Vehicles Corp, you can compare the effects of market volatilities on Ferrari NV and Electrameccanica 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 Ferrari NV with a short position of Electrameccanica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrari NV and Electrameccanica.
Diversification Opportunities for Ferrari NV and Electrameccanica
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ferrari and Electrameccanica is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ferrari NV and Electrameccanica Vehicles Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrameccanica Veh and Ferrari NV 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 Ferrari NV are associated (or correlated) with Electrameccanica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrameccanica Veh has no effect on the direction of Ferrari NV i.e., Ferrari NV and Electrameccanica go up and down completely randomly.
Pair Corralation between Ferrari NV and Electrameccanica
Given the investment horizon of 90 days Ferrari NV is expected to generate 0.23 times more return on investment than Electrameccanica. However, Ferrari NV is 4.31 times less risky than Electrameccanica. It trades about 0.09 of its potential returns per unit of risk. Electrameccanica Vehicles Corp is currently generating about -0.01 per unit of risk. If you would invest 22,066 in Ferrari NV on August 24, 2024 and sell it today you would earn a total of 20,885 from holding Ferrari NV or generate 94.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 32.06% |
| Values | Daily Returns |
Ferrari NV vs. Electrameccanica Vehicles Corp
Performance |
| Timeline |
| Ferrari NV |
| Electrameccanica Veh |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ferrari NV and Electrameccanica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrari NV and Electrameccanica
The main advantage of trading using opposite Ferrari NV and Electrameccanica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrari NV position performs unexpectedly, Electrameccanica 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 Electrameccanica will offset losses from the drop in Electrameccanica's long position.| Ferrari NV vs. Lucid Group | Ferrari NV vs. Rivian Automotive | Ferrari NV vs. Polestar Automotive Holding | Ferrari NV vs. Mullen Automotive |
| Electrameccanica vs. GreenPower Motor | Electrameccanica vs. Workhorse Group | Electrameccanica vs. Cenntro Electric Group | Electrameccanica vs. Volcon 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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