Correlation Between Canoo Holdings and Aeva Technologies,

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

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

Diversification Opportunities for Canoo Holdings and Aeva Technologies,

-0.05

Correlation Coefficient

Canoo Holdings  Aeva Technologies,

Good diversification

The 3 months correlation between Canoo and Aeva is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Canoo Holdings and Aeva Technologies, WT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeva Technologies, and Canoo 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 Canoo Holdings are associated (or correlated) with Aeva Technologies,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeva Technologies, has no effect on the direction of Canoo Holdings i.e., Canoo Holdings and Aeva Technologies, go up and down completely randomly.

Pair Corralation between Canoo Holdings and Aeva Technologies,

Assuming the 90 days horizon Canoo Holdings is expected to generate 1.77 times less return on investment than Aeva Technologies,. In addition to that, Canoo Holdings is 1.19 times more volatile than Aeva Technologies, WT. It trades about 0.06 of its total potential returns per unit of risk. Aeva Technologies, WT is currently generating about 0.12 per unit of volatility. If you would invest  5.25  in Aeva Technologies, WT on October 10, 2024 and sell it today you would earn a total of  2.85  from holding Aeva Technologies, WT or generate 54.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

Canoo Holdings  vs.  Aeva Technologies, WT

Canoo Holdings

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Canoo Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Canoo Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Aeva Technologies,

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aeva Technologies, WT are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Aeva Technologies, unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Canoo Holdings and Aeva Technologies,

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

The idea behind Canoo Holdings and Aeva Technologies, WT 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.