Correlation Between Evgo and Leslies
Can any of the company-specific risk be diversified away by investing in both Evgo and Leslies 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 Evgo and Leslies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evgo Inc and Leslies, you can compare the effects of market volatilities on Evgo and Leslies 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 Evgo with a short position of Leslies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evgo and Leslies.
Diversification Opportunities for Evgo and Leslies
Poor diversification
The 3 months correlation between Evgo and Leslies is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Evgo Inc and Leslies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leslies and Evgo 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 Evgo Inc are associated (or correlated) with Leslies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leslies has no effect on the direction of Evgo i.e., Evgo and Leslies go up and down completely randomly.
Pair Corralation between Evgo and Leslies
Given the investment horizon of 90 days Evgo Inc is expected to generate 0.51 times more return on investment than Leslies. However, Evgo Inc is 1.96 times less risky than Leslies. It trades about -0.32 of its potential returns per unit of risk. Leslies is currently generating about -0.29 per unit of risk. If you would invest 343.00 in Evgo Inc on November 27, 2024 and sell it today you would lose (76.00) from holding Evgo Inc or give up 22.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evgo Inc vs. Leslies
Performance |
| Timeline |
| Evgo Inc |
| Leslies |
Evgo and Leslies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evgo and Leslies
The main advantage of trading using opposite Evgo and Leslies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evgo position performs unexpectedly, Leslies 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 Leslies will offset losses from the drop in Leslies' long position.The idea behind Evgo Inc and Leslies 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.| Leslies vs. Sally Beauty Holdings | Leslies vs. ODP Corp | Leslies vs. 1 800 FLOWERSCOM | Leslies vs. Caseys General Stores |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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