Correlation Between Westport Fuel and Aeva Technologies,

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

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

Diversification Opportunities for Westport Fuel and Aeva Technologies,

0.14

Correlation Coefficient

Westport Fuel  Aeva Technologies,

Average diversification

The 3 months correlation between Westport and Aeva is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Westport Fuel Systems and Aeva Technologies, Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeva Technologies, Common and Westport Fuel 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 Westport Fuel Systems 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, Common has no effect on the direction of Westport Fuel i.e., Westport Fuel and Aeva Technologies, go up and down completely randomly.

Pair Corralation between Westport Fuel and Aeva Technologies,

Given the investment horizon of 90 days Westport Fuel is expected to generate 5.54 times less return on investment than Aeva Technologies,. But when comparing it to its historical volatility, Westport Fuel Systems is 1.86 times less risky than Aeva Technologies,. It trades about 0.04 of its potential returns per unit of risk. Aeva Technologies, Common is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  475.00  in Aeva Technologies, Common on December 29, 2024 and sell it today you would earn a total of  196.00  from holding Aeva Technologies, Common or generate 41.26% return on investment over 90 days.

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

Westport Fuel Systems  vs.  Aeva Technologies, Common

Westport Fuel Systems

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Westport Fuel Systems are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Westport Fuel may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Aeva Technologies, Common

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aeva Technologies, Common are ranked lower than 8 (%) 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 Westport Fuel and Aeva Technologies,

The main advantage of trading using opposite Westport Fuel and Aeva Technologies, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westport Fuel 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,'s long position.

The idea behind Westport Fuel Systems and Aeva Technologies, Common 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.

Check out your portfolio center.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.