Correlation Between EVgo Equity and Microvast Holdings
Can any of the company-specific risk be diversified away by investing in both EVgo Equity and Microvast 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 EVgo Equity and Microvast Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EVgo Equity Warrants and Microvast Holdings, you can compare the effects of market volatilities on EVgo Equity and Microvast 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 EVgo Equity with a short position of Microvast Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVgo Equity and Microvast Holdings.
Diversification Opportunities for EVgo Equity and Microvast Holdings
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EVgo and Microvast is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding EVgo Equity Warrants and Microvast Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microvast Holdings and EVgo Equity 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 Equity Warrants are associated (or correlated) with Microvast Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microvast Holdings has no effect on the direction of EVgo Equity i.e., EVgo Equity and Microvast Holdings go up and down completely randomly.
Pair Corralation between EVgo Equity and Microvast Holdings
Assuming the 90 days horizon EVgo Equity Warrants is expected to under-perform the Microvast Holdings. But the stock apears to be less risky and, when comparing its historical volatility, EVgo Equity Warrants is 1.5 times less risky than Microvast Holdings. The stock trades about -0.2 of its potential returns per unit of risk. The Microvast Holdings is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 45.00 in Microvast Holdings on November 3, 2024 and sell it today you would lose (19.90) from holding Microvast Holdings or give up 44.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EVgo Equity Warrants vs. Microvast Holdings
Performance |
| Timeline |
| EVgo Equity Warrants |
| Microvast Holdings |
EVgo Equity and Microvast Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVgo Equity and Microvast Holdings
The main advantage of trading using opposite EVgo Equity and Microvast Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVgo Equity position performs unexpectedly, Microvast 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 Microvast Holdings will offset losses from the drop in Microvast Holdings' long position.| EVgo Equity vs. Nuvve Holding Corp | EVgo Equity vs. Paysafe Ltd Wt | EVgo Equity vs. Canoo Holdings | EVgo Equity vs. Microvast Holdings |
| Microvast Holdings vs. Microvast Holdings | Microvast Holdings vs. EVgo Equity Warrants | Microvast Holdings vs. Paysafe Ltd Wt | Microvast Holdings vs. Faraday Future Intelligent |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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