Correlation Between AYRO and Cenntro Electric

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

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

Diversification Opportunities for AYRO and Cenntro Electric

0.74

Correlation Coefficient

AYRO  Cenntro Electric

Poor diversification

The 3 months correlation between AYRO and Cenntro is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding AYRO Inc and Cenntro Electric Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cenntro Electric and AYRO 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 AYRO Inc are associated (or correlated) with Cenntro Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cenntro Electric has no effect on the direction of AYRO i.e., AYRO and Cenntro Electric go up and down completely randomly.

Pair Corralation between AYRO and Cenntro Electric

Given the investment horizon of 90 days AYRO Inc is expected to generate 0.72 times more return on investment than Cenntro Electric. However, AYRO Inc is 1.38 times less risky than Cenntro Electric. It trades about -0.02 of its potential returns per unit of risk. Cenntro Electric Group is currently generating about -0.02 per unit of risk. If you would invest  70.00  in AYRO Inc on December 28, 2024 and sell it today you would lose (8.00) from holding AYRO Inc or give up 11.43% of portfolio value over 90 days.

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

AYRO Inc  vs.  Cenntro Electric Group

AYRO Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days AYRO Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Cenntro Electric

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cenntro Electric Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with AYRO and Cenntro Electric

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

The idea behind AYRO Inc and Cenntro Electric Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.