Correlation Between PTRA and Electrameccanica

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

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

Diversification Opportunities for PTRA and Electrameccanica

0.0

Correlation Coefficient

PTRA  Electrameccanica

Pay attention - limited upside

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

Pair Corralation between PTRA and Electrameccanica

If you would invest (100.00) in Electrameccanica Vehicles Corp on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Electrameccanica Vehicles Corp or generate -100.0% return on investment over 90 days.

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

PTRA  vs.  Electrameccanica Vehicles Corp

PTRA

Risk-Adjusted Performance

Very Weak

Over the last 90 days PTRA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, PTRA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Electrameccanica Veh

Risk-Adjusted Performance

Very Weak

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

Pair Trading with PTRA and Electrameccanica

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

The idea behind PTRA and Electrameccanica Vehicles Corp 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.