Correlation Between Arcimoto and Autoliv

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

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

Diversification Opportunities for Arcimoto and Autoliv

-0.81

Correlation Coefficient

Arcimoto  Autoliv

Pay attention - limited upside

The 3 months correlation between Arcimoto and Autoliv is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Arcimoto and Autoliv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autoliv and Arcimoto 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 Arcimoto are associated (or correlated) with Autoliv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autoliv has no effect on the direction of Arcimoto i.e., Arcimoto and Autoliv go up and down completely randomly.

Pair Corralation between Arcimoto and Autoliv

Considering the 90-day investment horizon Arcimoto is expected to under-perform the Autoliv. In addition to that, Arcimoto is 4.31 times more volatile than Autoliv. It trades about -0.04 of its total potential returns per unit of risk. Autoliv is currently generating about 0.13 per unit of volatility. If you would invest  9,530  in Autoliv on February 1, 2024 and sell it today you would earn a total of  2,449  from holding Autoliv or generate 25.7% return on investment over 90 days.

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

Arcimoto  vs.  Autoliv

Arcimoto

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arcimoto has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in June 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Autoliv

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Autoliv are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile essential indicators, Autoliv may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Arcimoto and Autoliv

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

The idea behind Arcimoto and Autoliv 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.