Correlation Between Volcon and Xpeng
Can any of the company-specific risk be diversified away by investing in both Volcon and Xpeng 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 Volcon and Xpeng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volcon Inc and Xpeng Inc, you can compare the effects of market volatilities on Volcon and Xpeng 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 Volcon with a short position of Xpeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volcon and Xpeng.
Diversification Opportunities for Volcon and Xpeng
Pay attention - limited upside
The 3 months correlation between Volcon and Xpeng is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Volcon Inc and Xpeng Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xpeng Inc and Volcon 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 Volcon Inc are associated (or correlated) with Xpeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xpeng Inc has no effect on the direction of Volcon i.e., Volcon and Xpeng go up and down completely randomly.
Pair Corralation between Volcon and Xpeng
Given the investment horizon of 90 days Volcon Inc is expected to under-perform the Xpeng. In addition to that, Volcon is 1.41 times more volatile than Xpeng Inc. It trades about -0.16 of its total potential returns per unit of risk. Xpeng Inc is currently generating about 0.14 per unit of volatility. If you would invest 837.00 in Xpeng Inc on September 3, 2024 and sell it today you would earn a total of 368.00 from holding Xpeng Inc or generate 43.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volcon Inc vs. Xpeng Inc
Performance |
| Timeline |
| Volcon Inc |
| Xpeng Inc |
Volcon and Xpeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volcon and Xpeng
The main advantage of trading using opposite Volcon and Xpeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volcon position performs unexpectedly, Xpeng 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 Xpeng will offset losses from the drop in Xpeng's long position.The idea behind Volcon Inc and Xpeng Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Xpeng vs. GreenPower Motor | Xpeng vs. ZEEKR Intelligent Technology | Xpeng vs. Volcon Inc | Xpeng vs. Ford Motor |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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