Correlation Between Optec International and ECARX Holdings

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

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

Diversification Opportunities for Optec International and ECARX Holdings

0.0

Correlation Coefficient

Optec International  ECARX Holdings

Pay attention - limited upside

The 3 months correlation between Optec and ECARX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Optec International and ECARX Holdings Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECARX Holdings Warrants and Optec International 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 Optec International are associated (or correlated) with ECARX Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECARX Holdings Warrants has no effect on the direction of Optec International i.e., Optec International and ECARX Holdings go up and down completely randomly.

Pair Corralation between Optec International and ECARX Holdings

If you would invest  11.00  in ECARX Holdings Warrants on December 4, 2024 and sell it today you would lose (3.00) from holding ECARX Holdings Warrants or give up 27.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Optec International  vs.  ECARX Holdings Warrants

Optec International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Optec International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Optec International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

ECARX Holdings Warrants

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ECARX Holdings Warrants are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, ECARX Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Optec International and ECARX Holdings

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

The idea behind Optec International and ECARX Holdings Warrants 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.