Correlation Between ECARX Holdings and Brembo SpA
Can any of the company-specific risk be diversified away by investing in both ECARX Holdings and Brembo SpA 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 ECARX Holdings and Brembo SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECARX Holdings Class and Brembo SpA, you can compare the effects of market volatilities on ECARX Holdings and Brembo SpA 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 ECARX Holdings with a short position of Brembo SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECARX Holdings and Brembo SpA.
Diversification Opportunities for ECARX Holdings and Brembo SpA
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between ECARX and Brembo is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding ECARX Holdings Class and Brembo SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brembo SpA and ECARX Holdings 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 ECARX Holdings Class are associated (or correlated) with Brembo SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brembo SpA has no effect on the direction of ECARX Holdings i.e., ECARX Holdings and Brembo SpA go up and down completely randomly.
Pair Corralation between ECARX Holdings and Brembo SpA
Considering the 90-day investment horizon ECARX Holdings Class is expected to generate 2.53 times more return on investment than Brembo SpA. However, ECARX Holdings is 2.53 times more volatile than Brembo SpA. It trades about -0.01 of its potential returns per unit of risk. Brembo SpA is currently generating about -0.05 per unit of risk. If you would invest 306.00 in ECARX Holdings Class on September 14, 2024 and sell it today you would lose (108.00) from holding ECARX Holdings Class or give up 35.29% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 59.11% |
Values | Daily Returns |
ECARX Holdings Class vs. Brembo SpA
Performance |
Timeline |
ECARX Holdings Class |
Brembo SpA |
ECARX Holdings and Brembo SpA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ECARX Holdings and Brembo SpA
The main advantage of trading using opposite ECARX Holdings and Brembo SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECARX Holdings position performs unexpectedly, Brembo SpA 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 Brembo SpA will offset losses from the drop in Brembo SpA's long position.ECARX Holdings vs. Ford Motor | ECARX Holdings vs. General Motors | ECARX Holdings vs. Goodyear Tire Rubber | ECARX Holdings vs. Li Auto |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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