Correlation Between Vicinity and Exro Technologies
Can any of the company-specific risk be diversified away by investing in both Vicinity and Exro Technologies 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 Exro Technologies 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 Exro Technologies, you can compare the effects of market volatilities on Vicinity and Exro Technologies 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 Exro Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vicinity and Exro Technologies.
Diversification Opportunities for Vicinity and Exro Technologies
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vicinity and Exro is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Vicinity Motor Corp and Exro Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exro Technologies 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 Exro Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exro Technologies has no effect on the direction of Vicinity i.e., Vicinity and Exro Technologies go up and down completely randomly.
Pair Corralation between Vicinity and Exro Technologies
Assuming the 90 days horizon Vicinity Motor Corp is expected to generate 1.65 times more return on investment than Exro Technologies. However, Vicinity is 1.65 times more volatile than Exro Technologies. It trades about -0.03 of its potential returns per unit of risk. Exro Technologies is currently generating about -0.08 per unit of risk. If you would invest 108.00 in Vicinity Motor Corp on August 31, 2024 and sell it today you would lose (101.00) from holding Vicinity Motor Corp or give up 93.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Vicinity Motor Corp vs. Exro Technologies
Performance |
| Timeline |
| Vicinity Motor Corp |
| Exro Technologies |
Vicinity and Exro Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vicinity and Exro Technologies
The main advantage of trading using opposite Vicinity and Exro Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vicinity position performs unexpectedly, Exro Technologies 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 Exro Technologies will offset losses from the drop in Exro Technologies' long position.| Vicinity vs. Vicinity Motor Corp | Vicinity vs. GreenPower Motor | Vicinity vs. Greenlane Renewables | Vicinity vs. Fobi AI |
| Exro Technologies vs. Nano One Materials | Exro Technologies vs. Greenlane Renewables | Exro Technologies vs. PyroGenesis Canada | Exro Technologies vs. Vicinity Motor Corp |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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