Correlation Between Auddia and Ree Automotive

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

By analyzing existing cross correlation between Auddia Inc and Ree Automotive Holding, you can compare the effects of market volatilities on Auddia and Ree Automotive 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 Auddia with a short position of Ree Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auddia and Ree Automotive.

Diversification Opportunities for Auddia and Ree Automotive

-0.18

Correlation Coefficient

Auddia  Ree Automotive

Good diversification

The 3 months correlation between Auddia and Ree is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Auddia Inc and Ree Automotive Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ree Automotive Holding and Auddia 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 Auddia Inc are associated (or correlated) with Ree Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ree Automotive Holding has no effect on the direction of Auddia i.e., Auddia and Ree Automotive go up and down completely randomly.

Pair Corralation between Auddia and Ree Automotive

Assuming the 90 days horizon Auddia Inc is expected to under-perform the Ree Automotive. In addition to that, Auddia is 2.26 times more volatile than Ree Automotive Holding. It trades about -0.1 of its total potential returns per unit of risk. Ree Automotive Holding is currently generating about 0.19 per unit of volatility. If you would invest  730.00  in Ree Automotive Holding on September 23, 2024 and sell it today you would earn a total of  189.00  from holding Ree Automotive Holding or generate 25.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.43%
Values	Daily Returns

Auddia Inc  vs.  Ree Automotive Holding

Auddia Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Auddia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Ree Automotive Holding

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ree Automotive Holding are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Ree Automotive exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Auddia and Ree Automotive

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

The idea behind Auddia Inc and Ree Automotive Holding 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.