Correlation Between Standard and ECARX Holdings
Can any of the company-specific risk be diversified away by investing in both Standard 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 Standard and ECARX Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Standard Motor Products and ECARX Holdings Class, you can compare the effects of market volatilities on Standard 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 Standard with a short position of ECARX Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard and ECARX Holdings.
Diversification Opportunities for Standard and ECARX Holdings
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Standard and ECARX is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Standard Motor Products 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 Standard 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 Standard Motor Products 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 Standard i.e., Standard and ECARX Holdings go up and down completely randomly.
Pair Corralation between Standard and ECARX Holdings
Considering the 90-day investment horizon Standard Motor Products is expected to generate 0.27 times more return on investment than ECARX Holdings. However, Standard Motor Products is 3.72 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 -0.02 per unit of risk. If you would invest 3,629 in Standard Motor Products on August 23, 2024 and sell it today you would lose (471.00) from holding Standard Motor Products or give up 12.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Standard Motor Products vs. ECARX Holdings Class
Performance |
| Timeline |
| Standard Motor Products |
| ECARX Holdings Class |
Standard and ECARX Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard and ECARX Holdings
The main advantage of trading using opposite Standard and ECARX Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard 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.| Standard vs. Dorman Products | Standard vs. Motorcar Parts of | Standard vs. Douglas Dynamics | Standard vs. Stoneridge |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
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