Correlation Between Compagnie Gnrale and Aeva Technologies

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

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

Diversification Opportunities for Compagnie Gnrale and Aeva Technologies

-0.25

Correlation Coefficient

Compagnie Gnrale  Aeva Technologies

Very good diversification

The 3 months correlation between Compagnie and Aeva is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Gnrale des and Aeva Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeva Technologies and Compagnie Gnrale 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 Compagnie Gnrale des 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 Compagnie Gnrale i.e., Compagnie Gnrale and Aeva Technologies go up and down completely randomly.

Pair Corralation between Compagnie Gnrale and Aeva Technologies

Assuming the 90 days horizon Compagnie Gnrale is expected to generate 2.55 times less return on investment than Aeva Technologies. But when comparing it to its historical volatility, Compagnie Gnrale des is 1.52 times less risky than Aeva Technologies. It trades about 0.01 of its potential returns per unit of risk. Aeva Technologies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  565.00  in Aeva Technologies on October 8, 2024 and sell it today you would lose (43.00) from holding Aeva Technologies or give up 7.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	87.04%
Values	Daily Returns

Compagnie Gnrale des  vs.  Aeva Technologies

Compagnie Gnrale des

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Compagnie Gnrale des has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Aeva Technologies

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aeva Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aeva Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Compagnie Gnrale and Aeva Technologies

The main advantage of trading using opposite Compagnie Gnrale and Aeva Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Gnrale 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' long position.

The idea behind Compagnie Gnrale des and Aeva Technologies 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.