Correlation Between Evgo and SunCar Technology
Can any of the company-specific risk be diversified away by investing in both Evgo and SunCar Technology 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 SunCar Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evgo Inc and SunCar Technology Group, you can compare the effects of market volatilities on Evgo and SunCar Technology 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 SunCar Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evgo and SunCar Technology.
Diversification Opportunities for Evgo and SunCar Technology
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evgo and SunCar is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Evgo Inc and SunCar Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunCar Technology 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 SunCar Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunCar Technology has no effect on the direction of Evgo i.e., Evgo and SunCar Technology go up and down completely randomly.
Pair Corralation between Evgo and SunCar Technology
Given the investment horizon of 90 days Evgo Inc is expected to under-perform the SunCar Technology. But the stock apears to be less risky and, when comparing its historical volatility, Evgo Inc is 1.35 times less risky than SunCar Technology. The stock trades about -0.21 of its potential returns per unit of risk. The SunCar Technology Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 31.00 in SunCar Technology Group on November 2, 2024 and sell it today you would earn a total of 2.00 from holding SunCar Technology Group or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 78.95% |
| Values | Daily Returns |
Evgo Inc vs. SunCar Technology Group
Performance |
| Timeline |
| Evgo Inc |
| SunCar Technology |
Evgo and SunCar Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evgo and SunCar Technology
The main advantage of trading using opposite Evgo and SunCar Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evgo position performs unexpectedly, SunCar Technology 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 SunCar Technology will offset losses from the drop in SunCar Technology's long position.The idea behind Evgo Inc and SunCar Technology Group 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.| SunCar Technology vs. Pure Cycle | SunCar Technology vs. Newell Brands | SunCar Technology vs. Timken Company | SunCar Technology vs. Procter Gamble |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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