Correlation Between Lightning EMotors and Ideanomics

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

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

Diversification Opportunities for Lightning EMotors and Ideanomics

0.03

Correlation Coefficient

Lightning EMotors  Ideanomics

Significant diversification

The 3 months correlation between Lightning and Ideanomics is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Lightning EMotors and Ideanomics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ideanomics and Lightning EMotors 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 Lightning EMotors are associated (or correlated) with Ideanomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ideanomics has no effect on the direction of Lightning EMotors i.e., Lightning EMotors and Ideanomics go up and down completely randomly.

Pair Corralation between Lightning EMotors and Ideanomics

If you would invest  386.00  in Lightning EMotors on September 20, 2024 and sell it today you would earn a total of  0.00  from holding Lightning EMotors or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Lightning EMotors  vs.  Ideanomics

Lightning EMotors

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ideanomics

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ideanomics are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Ideanomics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lightning EMotors and Ideanomics

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

The idea behind Lightning EMotors and Ideanomics 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.