Correlation Between Xpeng and Fisker
Can any of the company-specific risk be diversified away by investing in both Xpeng and Fisker 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 Xpeng and Fisker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xpeng Inc and Fisker Inc, you can compare the effects of market volatilities on Xpeng and Fisker 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 Xpeng with a short position of Fisker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xpeng and Fisker.
Diversification Opportunities for Xpeng and Fisker
Very weak diversification
The 3 months correlation between Xpeng and Fisker is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Xpeng Inc and Fisker Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisker Inc and Xpeng 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 Xpeng Inc are associated (or correlated) with Fisker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisker Inc has no effect on the direction of Xpeng i.e., Xpeng and Fisker go up and down completely randomly.
Pair Corralation between Xpeng and Fisker
Given the investment horizon of 90 days Xpeng Inc is expected to generate 0.86 times more return on investment than Fisker. However, Xpeng Inc is 1.16 times less risky than Fisker. It trades about 0.03 of its potential returns per unit of risk. Fisker Inc is currently generating about 0.01 per unit of risk. If you would invest 1,134 in Xpeng Inc on August 24, 2024 and sell it today you would earn a total of 95.00 from holding Xpeng Inc or generate 8.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 31.92% |
| Values | Daily Returns |
Xpeng Inc vs. Fisker Inc
Performance |
| Timeline |
| Xpeng Inc |
| Fisker Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Xpeng and Fisker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xpeng and Fisker
The main advantage of trading using opposite Xpeng and Fisker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xpeng position performs unexpectedly, Fisker 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 Fisker will offset losses from the drop in Fisker's long position.The idea behind Xpeng Inc and Fisker 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.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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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