Correlation Between Canoo Holdings and Glatfelter

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

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

Diversification Opportunities for Canoo Holdings and Glatfelter

-0.45

Correlation Coefficient

Canoo Holdings  Glatfelter

Very good diversification

The 3 months correlation between Canoo and Glatfelter is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Canoo Holdings and Glatfelter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glatfelter 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 Glatfelter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glatfelter has no effect on the direction of Canoo Holdings i.e., Canoo Holdings and Glatfelter go up and down completely randomly.

Pair Corralation between Canoo Holdings and Glatfelter

Assuming the 90 days horizon Canoo Holdings is expected to generate 3.85 times less return on investment than Glatfelter. In addition to that, Canoo Holdings is 1.49 times more volatile than Glatfelter. It trades about 0.0 of its total potential returns per unit of risk. Glatfelter is currently generating about 0.01 per unit of volatility. If you would invest  3,575  in Glatfelter on September 14, 2024 and sell it today you would lose (1,470) from holding Glatfelter or give up 41.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.55%
Values	Daily Returns

Canoo Holdings  vs.  Glatfelter

Canoo Holdings

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Canoo Holdings are ranked lower than 2 (%) 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.

Glatfelter

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Glatfelter has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Glatfelter is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Canoo Holdings and Glatfelter

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

The idea behind Canoo Holdings and Glatfelter 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.