Correlation Between Stoneridge and ECARX Holdings
Can any of the company-specific risk be diversified away by investing in both Stoneridge 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 Stoneridge and ECARX Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stoneridge and ECARX Holdings Class, you can compare the effects of market volatilities on Stoneridge 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 Stoneridge with a short position of ECARX Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stoneridge and ECARX Holdings.
Diversification Opportunities for Stoneridge and ECARX Holdings
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stoneridge and ECARX is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Stoneridge 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 Stoneridge 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 Stoneridge 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 Stoneridge i.e., Stoneridge and ECARX Holdings go up and down completely randomly.
Pair Corralation between Stoneridge and ECARX Holdings
Considering the 90-day investment horizon Stoneridge is expected to under-perform the ECARX Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Stoneridge is 2.52 times less risky than ECARX Holdings. The stock trades about -0.08 of its potential returns per unit of risk. The ECARX Holdings Class is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,006 in ECARX Holdings Class on August 23, 2024 and sell it today you would lose (842.00) from holding ECARX Holdings Class or give up 83.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stoneridge vs. ECARX Holdings Class
Performance |
| Timeline |
| Stoneridge |
| ECARX Holdings Class |
Stoneridge and ECARX Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stoneridge and ECARX Holdings
The main advantage of trading using opposite Stoneridge and ECARX Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stoneridge 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.| Stoneridge vs. Monro Muffler Brake | Stoneridge vs. Motorcar Parts of | Stoneridge vs. Standard Motor Products | Stoneridge vs. Douglas Dynamics |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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