Correlation Between Xos and Lightning EMotors
Can any of the company-specific risk be diversified away by investing in both Xos and Lightning EMotors 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 Xos and Lightning EMotors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xos Inc and Lightning EMotors, you can compare the effects of market volatilities on Xos and Lightning EMotors 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 Xos with a short position of Lightning EMotors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xos and Lightning EMotors.
Diversification Opportunities for Xos and Lightning EMotors
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xos and Lightning is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Xos Inc and Lightning EMotors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lightning EMotors and Xos 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 Xos Inc are associated (or correlated) with Lightning EMotors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lightning EMotors has no effect on the direction of Xos i.e., Xos and Lightning EMotors go up and down completely randomly.
Pair Corralation between Xos and Lightning EMotors
If you would invest 386.00 in Lightning EMotors on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Lightning EMotors or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Xos Inc vs. Lightning EMotors
Performance |
| Timeline |
| Xos Inc |
| Lightning EMotors |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Xos and Lightning EMotors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xos and Lightning EMotors
The main advantage of trading using opposite Xos and Lightning EMotors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xos position performs unexpectedly, Lightning EMotors 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 Lightning EMotors will offset losses from the drop in Lightning EMotors' long position.The idea behind Xos Inc and Lightning EMotors 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.| Lightning EMotors vs. American Premium Water | Lightning EMotors vs. Wabash National | Lightning EMotors vs. Titan International | Lightning EMotors vs. Xos 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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