Correlation Between Lordstown Motors and Porsche Automobile
Can any of the company-specific risk be diversified away by investing in both Lordstown Motors and Porsche Automobile 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 Porsche Automobile 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 Porsche Automobile Holding, you can compare the effects of market volatilities on Lordstown Motors and Porsche Automobile 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 Porsche Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lordstown Motors and Porsche Automobile.
Diversification Opportunities for Lordstown Motors and Porsche Automobile
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lordstown and Porsche is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lordstown Motors Corp and Porsche Automobile Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Porsche Automobile 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 Porsche Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Porsche Automobile has no effect on the direction of Lordstown Motors i.e., Lordstown Motors and Porsche Automobile go up and down completely randomly.
Pair Corralation between Lordstown Motors and Porsche Automobile
If you would invest 395.00 in Porsche Automobile Holding on November 28, 2024 and sell it today you would earn a total of 8.00 from holding Porsche Automobile Holding or generate 2.03% 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. Porsche Automobile Holding
Performance |
| Timeline |
| Lordstown Motors Corp |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Porsche Automobile |
Lordstown Motors and Porsche Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lordstown Motors and Porsche Automobile
The main advantage of trading using opposite Lordstown Motors and Porsche Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lordstown Motors position performs unexpectedly, Porsche Automobile 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 Porsche Automobile will offset losses from the drop in Porsche Automobile's long position.| Lordstown Motors vs. Workhorse Group | Lordstown Motors vs. Hyliion Holdings Corp | Lordstown Motors vs. Blink Charging Co |
| Porsche Automobile vs. Volkswagen AG 110 | Porsche Automobile vs. Volkswagen AG | Porsche Automobile vs. Mercedes Benz Group AG | Porsche Automobile vs. Volkswagen AG Pref |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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