Correlation Between Fisker and Xpeng

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

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

Diversification Opportunities for Fisker and Xpeng

0.38

Correlation Coefficient

Fisker  Xpeng

Weak diversification

The 3 months correlation between Fisker and Xpeng is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Fisker Inc and Xpeng Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xpeng Inc and Fisker 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 Fisker Inc are associated (or correlated) with Xpeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xpeng Inc has no effect on the direction of Fisker i.e., Fisker and Xpeng go up and down completely randomly.

Pair Corralation between Fisker and Xpeng

Considering the 90-day investment horizon Fisker Inc is expected to under-perform the Xpeng. In addition to that, Fisker is 2.16 times more volatile than Xpeng Inc. It trades about -0.2 of its total potential returns per unit of risk. Xpeng Inc is currently generating about 0.02 per unit of volatility. If you would invest  998.00  in Xpeng Inc on February 7, 2024 and sell it today you would lose (95.00) from holding Xpeng Inc or give up 9.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.33%
Values	Daily Returns

Fisker Inc  vs.  Xpeng Inc

Fisker Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fisker Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Xpeng Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Xpeng Inc are ranked lower than 3 (%) 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.

Pair Trading with Fisker and Xpeng

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

The idea behind Fisker Inc and Xpeng 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.