Correlation Between Canoo and Cenntro Electric

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

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

Diversification Opportunities for Canoo and Cenntro Electric

-0.42

Correlation Coefficient

Canoo  Cenntro Electric

Very good diversification

The 3 months correlation between Canoo and Cenntro is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Canoo 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 Canoo 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 Canoo 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 Canoo i.e., Canoo and Cenntro Electric go up and down completely randomly.

Pair Corralation between Canoo and Cenntro Electric

Given the investment horizon of 90 days Canoo Inc is expected to under-perform the Cenntro Electric. In addition to that, Canoo is 3.31 times more volatile than Cenntro Electric Group. It trades about -0.2 of its total potential returns per unit of risk. Cenntro Electric Group is currently generating about 0.05 per unit of volatility. If you would invest  123.00  in Cenntro Electric Group on September 3, 2024 and sell it today you would earn a total of  7.00  from holding Cenntro Electric Group or generate 5.69% return on investment over 90 days.

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

Canoo Inc  vs.  Cenntro Electric Group

Canoo Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canoo 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 technical and 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.

Cenntro Electric

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cenntro Electric Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Cenntro Electric may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Canoo and Cenntro Electric

The main advantage of trading using opposite Canoo and Cenntro Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canoo 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 Canoo 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.