Correlation Between Buhler Industries and Lightning EMotors

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

By analyzing existing cross correlation between Buhler Industries and Lightning EMotors, you can compare the effects of market volatilities on Buhler Industries and Lightning EMotors 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 Buhler Industries with a short position of Lightning EMotors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buhler Industries and Lightning EMotors.

Diversification Opportunities for Buhler Industries and Lightning EMotors

0.0

Correlation Coefficient

Buhler Industries  Lightning EMotors

Pay attention - limited upside

The 3 months correlation between Buhler and Lightning is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Buhler Industries and Lightning EMotors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lightning EMotors and Buhler Industries 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 Buhler Industries are associated (or correlated) with Lightning EMotors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lightning EMotors has no effect on the direction of Buhler Industries i.e., Buhler Industries and Lightning EMotors go up and down completely randomly.

Pair Corralation between Buhler Industries and Lightning EMotors

If you would invest  386.00  in Lightning EMotors on September 22, 2024 and sell it today you would earn a total of  0.00  from holding Lightning EMotors or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Buhler Industries  vs.  Lightning EMotors

Buhler Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Buhler Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Buhler Industries is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Lightning EMotors

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lightning EMotors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Lightning EMotors is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Buhler Industries and Lightning EMotors

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

The idea behind Buhler Industries and Lightning EMotors 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 CEOs Directory module to screen CEOs from public companies around the world.