Correlation Between Momentus and Ehang Holdings

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

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

Diversification Opportunities for Momentus and Ehang Holdings

-0.07

Correlation Coefficient

Momentus  Ehang Holdings

Good diversification

The 3 months correlation between Momentus and Ehang is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Momentus and Ehang Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ehang Holdings and Momentus 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 Momentus are associated (or correlated) with Ehang Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ehang Holdings has no effect on the direction of Momentus i.e., Momentus and Ehang Holdings go up and down completely randomly.

Pair Corralation between Momentus and Ehang Holdings

Given the investment horizon of 90 days Momentus is expected to generate 3.17 times more return on investment than Ehang Holdings. However, Momentus is 3.17 times more volatile than Ehang Holdings. It trades about 0.04 of its potential returns per unit of risk. Ehang Holdings is currently generating about 0.04 per unit of risk. If you would invest  74.00  in Momentus on August 30, 2024 and sell it today you would lose (19.00) from holding Momentus or give up 25.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Momentus  vs.  Ehang Holdings

Momentus

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Momentus are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Momentus unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ehang Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ehang Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Ehang Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Momentus and Ehang Holdings

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

The idea behind Momentus and Ehang Holdings 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.