Correlation Between Canoo Holdings and CGA Old

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

By analyzing existing cross correlation between Canoo Holdings and CGA Old, you can compare the effects of market volatilities on Canoo Holdings and CGA Old 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 CGA Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canoo Holdings and CGA Old.

Diversification Opportunities for Canoo Holdings and CGA Old

-0.14

Correlation Coefficient

Canoo Holdings  CGA Old

Good diversification

The 3 months correlation between Canoo and CGA is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Canoo Holdings and CGA Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGA Old 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 CGA Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGA Old has no effect on the direction of Canoo Holdings i.e., Canoo Holdings and CGA Old go up and down completely randomly.

Pair Corralation between Canoo Holdings and CGA Old

If you would invest  198.00  in CGA Old on October 25, 2024 and sell it today you would earn a total of  0.00  from holding CGA Old or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

Canoo Holdings  vs.  CGA Old

Canoo Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canoo Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

CGA Old

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days CGA Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat unfluctuating technical and fundamental indicators, CGA Old sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Canoo Holdings and CGA Old

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

The idea behind Canoo Holdings and CGA Old 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.