Correlation Between Volkswagen and Cenntro Electric
Can any of the company-specific risk be diversified away by investing in both Volkswagen and Cenntro 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 Volkswagen and Cenntro Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG Pref and Cenntro Electric Group, you can compare the effects of market volatilities on Volkswagen and Cenntro 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 Volkswagen with a short position of Cenntro Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Cenntro Electric.
Diversification Opportunities for Volkswagen and Cenntro Electric
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Volkswagen and Cenntro is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG Pref and Cenntro Electric Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cenntro Electric and Volkswagen 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 Volkswagen AG Pref are associated (or correlated) with Cenntro Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cenntro Electric has no effect on the direction of Volkswagen i.e., Volkswagen and Cenntro Electric go up and down completely randomly.
Pair Corralation between Volkswagen and Cenntro Electric
Assuming the 90 days horizon Volkswagen AG Pref is expected to under-perform the Cenntro Electric. But the pink sheet apears to be less risky and, when comparing its historical volatility, Volkswagen AG Pref is 1.71 times less risky than Cenntro Electric. The pink sheet trades about -0.33 of its potential returns per unit of risk. The Cenntro Electric Group is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 129.00 in Cenntro Electric Group on August 31, 2024 and sell it today you would lose (10.00) from holding Cenntro Electric Group or give up 7.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volkswagen AG Pref vs. Cenntro Electric Group
Performance |
| Timeline |
| Volkswagen AG Pref |
| Cenntro Electric |
Volkswagen and Cenntro Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and Cenntro Electric
The main advantage of trading using opposite Volkswagen and Cenntro Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen position performs unexpectedly, Cenntro 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 Cenntro Electric will offset losses from the drop in Cenntro Electric's long position.| Volkswagen vs. Volkswagen AG 110 | Volkswagen vs. Porsche Automobil Holding | Volkswagen vs. Ferrari NV | Volkswagen vs. Bayerische Motoren Werke |
| Cenntro Electric vs. Mullen Automotive | Cenntro Electric vs. Canoo Inc | Cenntro Electric vs. Hyzon Motors | Cenntro Electric vs. AYRO Inc |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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