Correlation Between MSCI ACWI and Canoo
Can any of the company-specific risk be diversified away by investing in both MSCI ACWI and Canoo 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 MSCI ACWI and Canoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSCI ACWI exAUCONSUMER and Canoo Inc, you can compare the effects of market volatilities on MSCI ACWI and Canoo 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 MSCI ACWI with a short position of Canoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSCI ACWI and Canoo.
Diversification Opportunities for MSCI ACWI and Canoo
Good diversification
The 3 months correlation between MSCI and Canoo is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding MSCI ACWI exAUCONSUMER and Canoo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canoo Inc and MSCI ACWI 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 MSCI ACWI exAUCONSUMER are associated (or correlated) with Canoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canoo Inc has no effect on the direction of MSCI ACWI i.e., MSCI ACWI and Canoo go up and down completely randomly.
Pair Corralation between MSCI ACWI and Canoo
Assuming the 90 days horizon MSCI ACWI exAUCONSUMER is expected to generate 0.02 times more return on investment than Canoo. However, MSCI ACWI exAUCONSUMER is 66.57 times less risky than Canoo. It trades about 0.08 of its potential returns per unit of risk. Canoo Inc is currently generating about -0.22 per unit of risk. If you would invest 2,470 in MSCI ACWI exAUCONSUMER on November 1, 2024 and sell it today you would earn a total of 34.00 from holding MSCI ACWI exAUCONSUMER or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MSCI ACWI exAUCONSUMER vs. Canoo Inc
Performance |
| Timeline |
| MSCI ACWI exAUCONSUMER |
| Canoo Inc |
MSCI ACWI and Canoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSCI ACWI and Canoo
The main advantage of trading using opposite MSCI ACWI and Canoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSCI ACWI position performs unexpectedly, Canoo 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 Canoo will offset losses from the drop in Canoo's long position.| MSCI ACWI vs. Harrow Health 8625 | MSCI ACWI vs. Babcock Wilcox Enterprises, | MSCI ACWI vs. Babcock Wilcox Enterprises | MSCI ACWI vs. Oxford Lane Capital |
| Canoo vs. Lucid Group | Canoo vs. Rivian Automotive | Canoo vs. Polestar Automotive Holding | Canoo vs. Mullen Automotive |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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