Correlation Between Xpeng and Volcon

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

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

Diversification Opportunities for Xpeng and Volcon

-0.87

Correlation Coefficient

Xpeng  Volcon

Pay attention - limited upside

The 3 months correlation between Xpeng and Volcon is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Xpeng Inc and Volcon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volcon Inc and Xpeng 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 Xpeng Inc are associated (or correlated) with Volcon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volcon Inc has no effect on the direction of Xpeng i.e., Xpeng and Volcon go up and down completely randomly.

Pair Corralation between Xpeng and Volcon

Given the investment horizon of 90 days Xpeng Inc is expected to generate 0.62 times more return on investment than Volcon. However, Xpeng Inc is 1.61 times less risky than Volcon. It trades about 0.2 of its potential returns per unit of risk. Volcon Inc is currently generating about -0.27 per unit of risk. If you would invest  1,187  in Xpeng Inc on December 28, 2024 and sell it today you would earn a total of  783.00  from holding Xpeng Inc or generate 65.96% return on investment over 90 days.

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

Xpeng Inc  vs.  Volcon Inc

Xpeng Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Xpeng Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Xpeng showed solid returns over the last few months and may actually be approaching a breakup point.

Volcon Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Volcon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Xpeng and Volcon

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

The idea behind Xpeng Inc and Volcon Inc 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .