Correlation Between Exro Technologies and Eguana Technologies
Can any of the company-specific risk be diversified away by investing in both Exro Technologies and Eguana Technologies 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 Exro Technologies and Eguana Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exro Technologies and Eguana Technologies, you can compare the effects of market volatilities on Exro Technologies and Eguana Technologies 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 Exro Technologies with a short position of Eguana Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exro Technologies and Eguana Technologies.
Diversification Opportunities for Exro Technologies and Eguana Technologies
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exro and Eguana is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Exro Technologies and Eguana Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eguana Technologies and Exro Technologies 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 Exro Technologies are associated (or correlated) with Eguana Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eguana Technologies has no effect on the direction of Exro Technologies i.e., Exro Technologies and Eguana Technologies go up and down completely randomly.
Pair Corralation between Exro Technologies and Eguana Technologies
Assuming the 90 days horizon Exro Technologies is expected to generate 2.64 times less return on investment than Eguana Technologies. But when comparing it to its historical volatility, Exro Technologies is 1.51 times less risky than Eguana Technologies. It trades about 0.14 of its potential returns per unit of risk. Eguana Technologies is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 0.45 in Eguana Technologies on September 1, 2024 and sell it today you would earn a total of 0.44 from holding Eguana Technologies or generate 97.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Exro Technologies vs. Eguana Technologies
Performance |
| Timeline |
| Exro Technologies |
| Eguana Technologies |
Exro Technologies and Eguana Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exro Technologies and Eguana Technologies
The main advantage of trading using opposite Exro Technologies and Eguana Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exro Technologies position performs unexpectedly, Eguana Technologies 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 Eguana Technologies will offset losses from the drop in Eguana Technologies' long position.| Exro Technologies vs. Novonix Ltd ADR | Exro Technologies vs. Magnis Energy Technologies | Exro Technologies vs. Ilika plc | Exro Technologies vs. FuelPositive Corp |
| Eguana Technologies vs. Advanced Energy Industries | Eguana Technologies vs. Hubbell | Eguana Technologies vs. Tantalus Systems Holding | Eguana Technologies vs. Legrand SA ADR |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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