Correlation Between Lordstown Motors and Honda
Can any of the company-specific risk be diversified away by investing in both Lordstown Motors and Honda 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 Lordstown Motors and Honda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lordstown Motors Corp and Honda Motor Co, you can compare the effects of market volatilities on Lordstown Motors and Honda 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 Lordstown Motors with a short position of Honda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lordstown Motors and Honda.
Diversification Opportunities for Lordstown Motors and Honda
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lordstown and Honda is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lordstown Motors Corp and Honda Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Honda Motor and Lordstown Motors 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 Lordstown Motors Corp are associated (or correlated) with Honda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Honda Motor has no effect on the direction of Lordstown Motors i.e., Lordstown Motors and Honda go up and down completely randomly.
Pair Corralation between Lordstown Motors and Honda
If you would invest (100.00) in Lordstown Motors Corp on November 28, 2024 and sell it today you would earn a total of 100.00 from holding Lordstown Motors Corp or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Lordstown Motors Corp vs. Honda Motor Co
Performance |
| Timeline |
| Lordstown Motors Corp |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Honda Motor |
Lordstown Motors and Honda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lordstown Motors and Honda
The main advantage of trading using opposite Lordstown Motors and Honda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lordstown Motors position performs unexpectedly, Honda 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 Honda will offset losses from the drop in Honda's long position.| Lordstown Motors vs. Workhorse Group | Lordstown Motors vs. Hyliion Holdings Corp | Lordstown Motors vs. Blink Charging Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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