Correlation Between Vicinity and Electric Last

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

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

Diversification Opportunities for Vicinity and Electric Last

0.0

Correlation Coefficient

Vicinity  Electric Last

Pay attention - limited upside

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

Pair Corralation between Vicinity and Electric Last

If you would invest (100.00) in Electric Last Mile on December 1, 2024 and sell it today you would earn a total of  100.00  from holding Electric Last Mile 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

Vicinity Motor Corp  vs.  Electric Last Mile

Vicinity Motor Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vicinity Motor Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Vicinity is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Electric Last Mile

Risk-Adjusted Performance

Very Weak

Over the last 90 days Electric Last Mile has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Electric Last is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Vicinity and Electric Last

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

The idea behind Vicinity Motor Corp and Electric Last Mile 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.