Correlation Between Bakkt Holdings and EVgo Equity
Can any of the company-specific risk be diversified away by investing in both Bakkt Holdings and EVgo Equity 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 Bakkt Holdings and EVgo Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bakkt Holdings Warrant and EVgo Equity Warrants, you can compare the effects of market volatilities on Bakkt Holdings and EVgo Equity 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 Bakkt Holdings with a short position of EVgo Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakkt Holdings and EVgo Equity.
Diversification Opportunities for Bakkt Holdings and EVgo Equity
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bakkt and EVgo is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Bakkt Holdings Warrant and EVgo Equity Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVgo Equity Warrants and Bakkt Holdings 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 Bakkt Holdings Warrant are associated (or correlated) with EVgo Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVgo Equity Warrants has no effect on the direction of Bakkt Holdings i.e., Bakkt Holdings and EVgo Equity go up and down completely randomly.
Pair Corralation between Bakkt Holdings and EVgo Equity
Assuming the 90 days trading horizon Bakkt Holdings Warrant is expected to generate 5.5 times more return on investment than EVgo Equity. However, Bakkt Holdings is 5.5 times more volatile than EVgo Equity Warrants. It trades about 0.23 of its potential returns per unit of risk. EVgo Equity Warrants is currently generating about -0.11 per unit of risk. If you would invest 10.00 in Bakkt Holdings Warrant on August 31, 2024 and sell it today you would earn a total of 34.00 from holding Bakkt Holdings Warrant or generate 340.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bakkt Holdings Warrant vs. EVgo Equity Warrants
Performance |
| Timeline |
| Bakkt Holdings Warrant |
| EVgo Equity Warrants |
Bakkt Holdings and EVgo Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakkt Holdings and EVgo Equity
The main advantage of trading using opposite Bakkt Holdings and EVgo Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakkt Holdings position performs unexpectedly, EVgo Equity 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 EVgo Equity will offset losses from the drop in EVgo Equity's long position.The idea behind Bakkt Holdings Warrant and EVgo Equity Warrants 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.| EVgo Equity vs. Nuvve Holding Corp | EVgo Equity vs. Paysafe Ltd Wt | EVgo Equity vs. Canoo Holdings | EVgo Equity vs. Microvast Holdings |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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