Correlation Between Cango and Evgo
Can any of the company-specific risk be diversified away by investing in both Cango and Evgo 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 Cango and Evgo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cango Inc and Evgo Inc, you can compare the effects of market volatilities on Cango and Evgo 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 Cango with a short position of Evgo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cango and Evgo.
Diversification Opportunities for Cango and Evgo
Average diversification
The 3 months correlation between Cango and Evgo is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Cango Inc and Evgo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evgo Inc and Cango 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 Cango Inc are associated (or correlated) with Evgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evgo Inc has no effect on the direction of Cango i.e., Cango and Evgo go up and down completely randomly.
Pair Corralation between Cango and Evgo
Given the investment horizon of 90 days Cango Inc is expected to generate 0.63 times more return on investment than Evgo. However, Cango Inc is 1.59 times less risky than Evgo. It trades about 0.07 of its potential returns per unit of risk. Evgo Inc is currently generating about 0.03 per unit of risk. If you would invest 134.00 in Cango Inc on August 26, 2024 and sell it today you would earn a total of 247.00 from holding Cango Inc or generate 184.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cango Inc vs. Evgo Inc
Performance |
| Timeline |
| Cango Inc |
| Evgo Inc |
Cango and Evgo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cango and Evgo
The main advantage of trading using opposite Cango and Evgo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cango position performs unexpectedly, Evgo 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 will offset losses from the drop in Evgo's long position.| Cango vs. Cars Inc | Cango vs. KAR Auction Services | Cango vs. Rush Enterprises B | Cango vs. Rush Enterprises A |
| Evgo vs. Kingsway Financial Services | Evgo vs. KAR Auction Services | Evgo vs. Cango Inc | Evgo vs. Vroom 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 the Money Managers module to screen money managers from public funds and ETFs managed around the world.
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