Correlation Between BASE and EzFill Holdings
Can any of the company-specific risk be diversified away by investing in both BASE and EzFill 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 BASE and EzFill Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BASE Inc and EzFill Holdings, you can compare the effects of market volatilities on BASE and EzFill 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 BASE with a short position of EzFill Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BASE and EzFill Holdings.
Diversification Opportunities for BASE and EzFill Holdings
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BASE and EzFill is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding BASE Inc and EzFill Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EzFill Holdings and BASE 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 BASE Inc are associated (or correlated) with EzFill Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EzFill Holdings has no effect on the direction of BASE i.e., BASE and EzFill Holdings go up and down completely randomly.
Pair Corralation between BASE and EzFill Holdings
Assuming the 90 days horizon BASE Inc is expected to generate 0.98 times more return on investment than EzFill Holdings. However, BASE Inc is 1.02 times less risky than EzFill Holdings. It trades about 0.19 of its potential returns per unit of risk. EzFill Holdings is currently generating about -0.06 per unit of risk. If you would invest 126.00 in BASE Inc on August 27, 2024 and sell it today you would earn a total of 24.00 from holding BASE Inc or generate 19.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BASE Inc vs. EzFill Holdings
Performance |
| Timeline |
| BASE Inc |
| EzFill Holdings |
BASE and EzFill Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BASE and EzFill Holdings
The main advantage of trading using opposite BASE and EzFill Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BASE position performs unexpectedly, EzFill 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 EzFill Holdings will offset losses from the drop in EzFill Holdings' long position.The idea behind BASE Inc and EzFill 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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