Correlation Between Micromobility and Ree Automotive

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

By analyzing existing cross correlation between Micromobility and Ree Automotive Holding, you can compare the effects of market volatilities on Micromobility and Ree Automotive 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 Micromobility with a short position of Ree Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micromobility and Ree Automotive.

Diversification Opportunities for Micromobility and Ree Automotive

-0.5

Correlation Coefficient

Micromobility  Ree Automotive

Very good diversification

The 3 months correlation between Micromobility and Ree is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Micromobility and Ree Automotive Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ree Automotive Holding and Micromobility 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 Micromobility are associated (or correlated) with Ree Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ree Automotive Holding has no effect on the direction of Micromobility i.e., Micromobility and Ree Automotive go up and down completely randomly.

Pair Corralation between Micromobility and Ree Automotive

If you would invest  394.00  in Ree Automotive Holding on September 29, 2024 and sell it today you would earn a total of  506.00  from holding Ree Automotive Holding or generate 128.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.79%
Values	Daily Returns

Micromobility  vs.  Ree Automotive Holding

Micromobility

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Micromobility has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Micromobility is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Ree Automotive Holding

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ree Automotive Holding are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Ree Automotive exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Micromobility and Ree Automotive

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

The idea behind Micromobility and Ree Automotive Holding 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 Transaction History module to view history of all your transactions and understand their impact on performance.