Correlation Between Lightning EMotors and Rev
Can any of the company-specific risk be diversified away by investing in both Lightning EMotors and Rev 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 Lightning EMotors and Rev into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lightning EMotors and Rev Group, you can compare the effects of market volatilities on Lightning EMotors and Rev 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 Lightning EMotors with a short position of Rev. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lightning EMotors and Rev.
Diversification Opportunities for Lightning EMotors and Rev
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lightning and Rev is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Lightning EMotors and Rev Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rev Group and Lightning EMotors 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 Lightning EMotors are associated (or correlated) with Rev. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rev Group has no effect on the direction of Lightning EMotors i.e., Lightning EMotors and Rev go up and down completely randomly.
Pair Corralation between Lightning EMotors and Rev
If you would invest 2,696 in Rev Group on September 12, 2024 and sell it today you would earn a total of 264.00 from holding Rev Group or generate 9.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.59% |
| Values | Daily Returns |
Lightning EMotors vs. Rev Group
Performance |
| Timeline |
| Lightning EMotors |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Rev Group |
Lightning EMotors and Rev Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lightning EMotors and Rev
The main advantage of trading using opposite Lightning EMotors and Rev positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lightning EMotors position performs unexpectedly, Rev 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 Rev will offset losses from the drop in Rev's long position.| Lightning EMotors vs. Lion Electric Corp | Lightning EMotors vs. American Premium Water | Lightning EMotors vs. Wabash National | Lightning EMotors vs. Titan International |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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