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
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between EVgo and Microvast is -0.08. 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 generate 0.83 times more return on investment than Microvast Holdings. However, EVgo Equity Warrants is 1.2 times less risky than Microvast Holdings. It trades about 0.06 of its potential returns per unit of risk. Microvast Holdings is currently generating about 0.04 per unit of risk. If you would invest 71.00 in EVgo Equity Warrants on August 27, 2024 and sell it today you would earn a total of 40.00 from holding EVgo Equity Warrants or generate 56.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.24% |
| 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. FREYR Battery SA | Microvast Holdings vs. Microvast Holdings | Microvast Holdings vs. Chardan NexTech Acquisition | Microvast Holdings vs. Solid Power |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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