Correlation Between Eve Holding and Ehang Holdings

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Can any of the company-specific risk be diversified away by investing in both Eve Holding and Ehang Holdings 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 Eve Holding and Ehang Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eve Holding and Ehang Holdings, you can compare the effects of market volatilities on Eve Holding and Ehang Holdings 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 Eve Holding with a short position of Ehang Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eve Holding and Ehang Holdings.

Diversification Opportunities for Eve Holding and Ehang Holdings

-0.55
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Eve and Ehang is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Eve Holding and Ehang Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ehang Holdings and Eve Holding 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 Eve Holding are associated (or correlated) with Ehang Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ehang Holdings has no effect on the direction of Eve Holding i.e., Eve Holding and Ehang Holdings go up and down completely randomly.

Pair Corralation between Eve Holding and Ehang Holdings

Given the investment horizon of 90 days Eve Holding is expected to generate 0.74 times more return on investment than Ehang Holdings. However, Eve Holding is 1.35 times less risky than Ehang Holdings. It trades about 0.0 of its potential returns per unit of risk. Ehang Holdings is currently generating about -0.03 per unit of risk. If you would invest  540.00  in Eve Holding on January 22, 2024 and sell it today you would lose (10.00) from holding Eve Holding or give up 1.85% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Eve Holding  vs.  Ehang Holdings

 Performance 
       Timeline  
Eve Holding 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Eve Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.
Ehang Holdings 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Ehang Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Ehang Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Eve Holding and Ehang Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Eve Holding and Ehang Holdings

The main advantage of trading using opposite Eve Holding and Ehang Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eve Holding position performs unexpectedly, Ehang Holdings 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 Ehang Holdings will offset losses from the drop in Ehang Holdings' long position.
The idea behind Eve Holding and Ehang Holdings 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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