Correlation Between Lottery Common and Microvast Holdings

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

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

Diversification Opportunities for Lottery Common and Microvast Holdings

0.73

Correlation Coefficient

Lottery Common  Microvast Holdings

Poor diversification

The 3 months correlation between Lottery and Microvast is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Lottery Common Stock and Microvast Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microvast Holdings and Lottery Common 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 Lottery Common Stock are associated (or correlated) with Microvast Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microvast Holdings has no effect on the direction of Lottery Common i.e., Lottery Common and Microvast Holdings go up and down completely randomly.

Pair Corralation between Lottery Common and Microvast Holdings

Given the investment horizon of 90 days Lottery Common Stock is expected to generate 0.33 times more return on investment than Microvast Holdings. However, Lottery Common Stock is 2.99 times less risky than Microvast Holdings. It trades about -0.07 of its potential returns per unit of risk. Microvast Holdings is currently generating about -0.05 per unit of risk. If you would invest  232.00  in Lottery Common Stock on February 27, 2024 and sell it today you would lose (49.00) from holding Lottery Common Stock or give up 21.12% of portfolio value over 90 days.

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

Lottery Common Stock  vs.  Microvast Holdings

Lottery Common Stock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lottery Common Stock 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 basic indicators remain fairly strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Microvast Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Microvast Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.

Pair Trading with Lottery Common and Microvast Holdings

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

The idea behind Lottery Common Stock and Microvast 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.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.