Correlation Between Stellantis and AYRO
Can any of the company-specific risk be diversified away by investing in both Stellantis and AYRO 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 Stellantis and AYRO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellantis NV and AYRO Inc, you can compare the effects of market volatilities on Stellantis and AYRO 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 Stellantis with a short position of AYRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellantis and AYRO.
Diversification Opportunities for Stellantis and AYRO
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stellantis and AYRO is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Stellantis NV and AYRO Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AYRO Inc and Stellantis 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 Stellantis NV are associated (or correlated) with AYRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AYRO Inc has no effect on the direction of Stellantis i.e., Stellantis and AYRO go up and down completely randomly.
Pair Corralation between Stellantis and AYRO
Given the investment horizon of 90 days Stellantis NV is expected to generate 0.8 times more return on investment than AYRO. However, Stellantis NV is 1.25 times less risky than AYRO. It trades about -0.13 of its potential returns per unit of risk. AYRO Inc is currently generating about -0.13 per unit of risk. If you would invest 1,375 in Stellantis NV on August 27, 2024 and sell it today you would lose (70.00) from holding Stellantis NV or give up 5.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stellantis NV vs. AYRO Inc
Performance |
| Timeline |
| Stellantis NV |
| AYRO Inc |
Stellantis and AYRO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellantis and AYRO
The main advantage of trading using opposite Stellantis and AYRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellantis position performs unexpectedly, AYRO 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 AYRO will offset losses from the drop in AYRO's long position.| Stellantis vs. Porsche Automobile Holding | Stellantis vs. Toyota Motor | Stellantis vs. Honda Motor Co | Stellantis vs. General Motors |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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