Correlation Between Ehang Holdings and Marten Transport

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

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

Diversification Opportunities for Ehang Holdings and Marten Transport

-0.75

Correlation Coefficient

Ehang Holdings  Marten Transport

Pay attention - limited upside

The 3 months correlation between Ehang and Marten is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ehang Holdings and Marten Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marten Transport and Ehang 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 Ehang Holdings are associated (or correlated) with Marten Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marten Transport has no effect on the direction of Ehang Holdings i.e., Ehang Holdings and Marten Transport go up and down completely randomly.

Pair Corralation between Ehang Holdings and Marten Transport

Allowing for the 90-day total investment horizon Ehang Holdings is expected to generate 3.15 times more return on investment than Marten Transport. However, Ehang Holdings is 3.15 times more volatile than Marten Transport. It trades about 0.13 of its potential returns per unit of risk. Marten Transport is currently generating about -0.12 per unit of risk. If you would invest  1,603  in Ehang Holdings on December 27, 2024 and sell it today you would earn a total of  630.00  from holding Ehang Holdings or generate 39.3% return on investment over 90 days.

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

Ehang Holdings  vs.  Marten Transport

Ehang Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ehang Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Ehang Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Marten Transport

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marten Transport has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating 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 Ehang Holdings and Marten Transport

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

The idea behind Ehang Holdings and Marten Transport 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.