Correlation Between Vicinity and AYRO
Can any of the company-specific risk be diversified away by investing in both Vicinity 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 Vicinity and AYRO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vicinity Motor Corp and AYRO Inc, you can compare the effects of market volatilities on Vicinity 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 Vicinity with a short position of AYRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vicinity and AYRO.
Diversification Opportunities for Vicinity and AYRO
Poor diversification
The 3 months correlation between Vicinity and AYRO is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Vicinity Motor Corp and AYRO Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AYRO Inc and Vicinity 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 Vicinity Motor Corp 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 Vicinity i.e., Vicinity and AYRO go up and down completely randomly.
Pair Corralation between Vicinity and AYRO
Considering the 90-day investment horizon Vicinity Motor Corp is expected to under-perform the AYRO. In addition to that, Vicinity is 6.11 times more volatile than AYRO Inc. It trades about -0.1 of its total potential returns per unit of risk. AYRO Inc is currently generating about -0.08 per unit of volatility. If you would invest 114.00 in AYRO Inc on August 24, 2024 and sell it today you would lose (39.00) from holding AYRO Inc or give up 34.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vicinity Motor Corp vs. AYRO Inc
Performance |
| Timeline |
| Vicinity Motor Corp |
| AYRO Inc |
Vicinity and AYRO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vicinity and AYRO
The main advantage of trading using opposite Vicinity and AYRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vicinity 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.| Vicinity vs. Blue Bird Corp | Vicinity vs. AYRO Inc | Vicinity vs. BAIC Motor | Vicinity vs. Zapp Electric Vehicles |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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