Correlation Between Electrameccanica and Kandi Technologies

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

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

Diversification Opportunities for Electrameccanica and Kandi Technologies

-0.7

Correlation Coefficient

Electrameccanica  Kandi Technologies

Excellent diversification

The 3 months correlation between Electrameccanica and Kandi is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Electrameccanica Vehicles Corp and Kandi Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandi Technologies and Electrameccanica 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 Electrameccanica Vehicles Corp are associated (or correlated) with Kandi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kandi Technologies has no effect on the direction of Electrameccanica i.e., Electrameccanica and Kandi Technologies go up and down completely randomly.

Pair Corralation between Electrameccanica and Kandi Technologies

If you would invest  72.00  in Electrameccanica Vehicles Corp on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Electrameccanica Vehicles Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Electrameccanica Vehicles Corp  vs.  Kandi Technologies Group

Electrameccanica Veh

Risk-Adjusted Performance

0 of 100

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.

Kandi Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kandi Technologies Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Electrameccanica and Kandi Technologies

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

The idea behind Electrameccanica Vehicles Corp and Kandi Technologies Group 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.