Correlation Between Velodyne Lidar and Concrete Pumping

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

Diversification Opportunities for Velodyne Lidar and Concrete Pumping

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between Velodyne and Concrete is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Velodyne Lidar and Concrete Pumping Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concrete Pumping Holdings and Velodyne Lidar 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 Velodyne Lidar are associated (or correlated) with Concrete Pumping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concrete Pumping Holdings has no effect on the direction of Velodyne Lidar i.e., Velodyne Lidar and Concrete Pumping go up and down completely randomly.

Pair Corralation between Velodyne Lidar and Concrete Pumping

Given the investment horizon of 90 days Velodyne Lidar is expected to under-perform the Concrete Pumping. In addition to that, Velodyne Lidar is 1.93 times more volatile than Concrete Pumping Holdings. It trades about -0.15 of its total potential returns per unit of risk. Concrete Pumping Holdings is currently generating about -0.08 per unit of volatility. If you would invest  673.00  in Concrete Pumping Holdings on July 5, 2022 and sell it today you would lose (28.00)  from holding Concrete Pumping Holdings or give up 4.16% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Velodyne Lidar  vs.  Concrete Pumping Holdings

 Performance (%) 
       Timeline  
Velodyne Lidar 
Velodyne Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Velodyne Lidar are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting fundamental indicators, Velodyne Lidar may actually be approaching a critical reversion point that can send shares even higher in November 2022.

Velodyne Price Channel

Concrete Pumping Holdings 
Concrete Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Concrete Pumping Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental indicators, Concrete Pumping may actually be approaching a critical reversion point that can send shares even higher in November 2022.

Concrete Price Channel

Velodyne Lidar and Concrete Pumping Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Velodyne Lidar and Concrete Pumping

The main advantage of trading using opposite Velodyne Lidar and Concrete Pumping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Velodyne Lidar position performs unexpectedly, Concrete Pumping 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 Concrete Pumping will offset losses from the drop in Concrete Pumping's long position.
Velodyne Lidar vs. Amazon Inc
The idea behind Velodyne Lidar and Concrete Pumping 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.
Concrete Pumping vs. Amazon Inc
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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