Correlation Between Aeva Technologies, and Continental Aktiengesellscha

Can any of the company-specific risk be diversified away by investing in both Aeva Technologies, and Continental Aktiengesellscha 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 Aeva Technologies, and Continental Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aeva Technologies, Common and Continental Aktiengesellschaft, you can compare the effects of market volatilities on Aeva Technologies, and Continental Aktiengesellscha 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 Aeva Technologies, with a short position of Continental Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeva Technologies, and Continental Aktiengesellscha.

Diversification Opportunities for Aeva Technologies, and Continental Aktiengesellscha

-0.61

Correlation Coefficient

Aeva Technologies,  Continental Aktiengesellscha

Excellent diversification

The 3 months correlation between Aeva and Continental is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Aeva Technologies, Common and Continental Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental Aktiengesellscha and Aeva Technologies, 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 Aeva Technologies, Common are associated (or correlated) with Continental Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental Aktiengesellscha has no effect on the direction of Aeva Technologies, i.e., Aeva Technologies, and Continental Aktiengesellscha go up and down completely randomly.

Pair Corralation between Aeva Technologies, and Continental Aktiengesellscha

Given the investment horizon of 90 days Aeva Technologies, is expected to generate 2.43 times less return on investment than Continental Aktiengesellscha. In addition to that, Aeva Technologies, is 1.8 times more volatile than Continental Aktiengesellschaft. It trades about 0.02 of its total potential returns per unit of risk. Continental Aktiengesellschaft is currently generating about 0.08 per unit of volatility. If you would invest  6,640  in Continental Aktiengesellschaft on December 22, 2024 and sell it today you would earn a total of  982.00  from holding Continental Aktiengesellschaft or generate 14.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Aeva Technologies, Common  vs.  Continental Aktiengesellschaft

Aeva Technologies, Common

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aeva Technologies, Common are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aeva Technologies, may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Continental Aktiengesellscha

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Continental Aktiengesellschaft are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Continental Aktiengesellscha reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aeva Technologies, and Continental Aktiengesellscha

The main advantage of trading using opposite Aeva Technologies, and Continental Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeva Technologies, position performs unexpectedly, Continental Aktiengesellscha 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 Continental Aktiengesellscha will offset losses from the drop in Continental Aktiengesellscha's long position.

The idea behind Aeva Technologies, Common and Continental Aktiengesellschaft 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.