Correlation Between Canoo Holdings and Ceapro

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

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

Diversification Opportunities for Canoo Holdings and Ceapro

-0.56

Correlation Coefficient

Canoo Holdings  Ceapro

Excellent diversification

The 3 months correlation between Canoo and Ceapro is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Canoo Holdings and Ceapro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceapro Inc 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 Ceapro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceapro Inc has no effect on the direction of Canoo Holdings i.e., Canoo Holdings and Ceapro go up and down completely randomly.

Pair Corralation between Canoo Holdings and Ceapro

If you would invest  2.12  in Canoo Holdings on September 5, 2024 and sell it today you would earn a total of  0.10  from holding Canoo Holdings or generate 4.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

Canoo Holdings  vs.  Ceapro Inc

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 weak performance in the last few months, the Stock's basic 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.

Ceapro Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ceapro Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ceapro is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Canoo Holdings and Ceapro

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

The idea behind Canoo Holdings and Ceapro Inc 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.