Correlation Between Volvo AB and Lion Electric
Can any of the company-specific risk be diversified away by investing in both Volvo AB and Lion Electric 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 Volvo AB and Lion Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volvo AB ser and Lion Electric Corp, you can compare the effects of market volatilities on Volvo AB and Lion Electric 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 Volvo AB with a short position of Lion Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volvo AB and Lion Electric.
Diversification Opportunities for Volvo AB and Lion Electric
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Volvo and Lion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Volvo AB ser and Lion Electric Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Electric Corp and Volvo AB 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 Volvo AB ser are associated (or correlated) with Lion Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Electric Corp has no effect on the direction of Volvo AB i.e., Volvo AB and Lion Electric go up and down completely randomly.
Pair Corralation between Volvo AB and Lion Electric
If you would invest 1,747 in Volvo AB ser on November 19, 2024 and sell it today you would earn a total of 1,238 from holding Volvo AB ser or generate 70.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Volvo AB ser vs. Lion Electric Corp
Performance |
| Timeline |
| Volvo AB ser |
| Lion Electric Corp |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Volvo AB and Lion Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volvo AB and Lion Electric
The main advantage of trading using opposite Volvo AB and Lion Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volvo AB position performs unexpectedly, Lion Electric 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 Lion Electric will offset losses from the drop in Lion Electric's long position.| Volvo AB vs. Daimler Truck Holding | Volvo AB vs. Oshkosh | Volvo AB vs. Hydrofarm Holdings Group | Volvo AB vs. Hino Motors Ltd |
| Lion Electric vs. Xos Inc | Lion Electric vs. Ideanomics | Lion Electric vs. Nikola Corp | Lion Electric vs. Wabash National |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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