Correlation Between Marketing Worldwide and Aeva Technologies

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

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

Diversification Opportunities for Marketing Worldwide and Aeva Technologies

-0.33

Correlation Coefficient

Marketing Worldwide  Aeva Technologies

Very good diversification

The 3 months correlation between Marketing and Aeva is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Marketing Worldwide and Aeva Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeva Technologies and Marketing Worldwide 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 Marketing Worldwide 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 Marketing Worldwide i.e., Marketing Worldwide and Aeva Technologies go up and down completely randomly.

Pair Corralation between Marketing Worldwide and Aeva Technologies

Given the investment horizon of 90 days Marketing Worldwide is expected to generate 10.8 times more return on investment than Aeva Technologies. However, Marketing Worldwide is 10.8 times more volatile than Aeva Technologies. It trades about 0.17 of its potential returns per unit of risk. Aeva Technologies is currently generating about 0.15 per unit of risk. If you would invest  0.03  in Marketing Worldwide on October 8, 2024 and sell it today you would lose (0.01) from holding Marketing Worldwide or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Marketing Worldwide  vs.  Aeva Technologies

Marketing Worldwide

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Marketing Worldwide are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Marketing Worldwide exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 Marketing Worldwide and Aeva Technologies

The main advantage of trading using opposite Marketing Worldwide and Aeva Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marketing Worldwide 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 Marketing Worldwide 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.