Correlation Between EZGO Technologies and Callaway Golf
Can any of the company-specific risk be diversified away by investing in both EZGO Technologies and Callaway Golf 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 EZGO Technologies and Callaway Golf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EZGO Technologies and Callaway Golf, you can compare the effects of market volatilities on EZGO Technologies and Callaway Golf 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 EZGO Technologies with a short position of Callaway Golf. Check out your portfolio center. Please also check ongoing floating volatility patterns of EZGO Technologies and Callaway Golf.
Diversification Opportunities for EZGO Technologies and Callaway Golf
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EZGO and Callaway is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding EZGO Technologies and Callaway Golf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Callaway Golf and EZGO 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 EZGO Technologies are associated (or correlated) with Callaway Golf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Callaway Golf has no effect on the direction of EZGO Technologies i.e., EZGO Technologies and Callaway Golf go up and down completely randomly.
Pair Corralation between EZGO Technologies and Callaway Golf
Given the investment horizon of 90 days EZGO Technologies is expected to under-perform the Callaway Golf. In addition to that, EZGO Technologies is 2.95 times more volatile than Callaway Golf. It trades about -0.02 of its total potential returns per unit of risk. Callaway Golf is currently generating about -0.05 per unit of volatility. If you would invest 2,092 in Callaway Golf on September 5, 2024 and sell it today you would lose (1,271) from holding Callaway Golf or give up 60.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EZGO Technologies vs. Callaway Golf
Performance |
| Timeline |
| EZGO Technologies |
| Callaway Golf |
EZGO Technologies and Callaway Golf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EZGO Technologies and Callaway Golf
The main advantage of trading using opposite EZGO Technologies and Callaway Golf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EZGO Technologies position performs unexpectedly, Callaway Golf 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 Callaway Golf will offset losses from the drop in Callaway Golf's long position.| EZGO Technologies vs. Vision Marine Technologies | EZGO Technologies vs. Marine Products | EZGO Technologies vs. Thor Industries | EZGO Technologies vs. BRP Inc |
| Callaway Golf vs. Bowlero Corp | Callaway Golf vs. Johnson Outdoors | Callaway Golf vs. YETI Holdings | Callaway Golf vs. Xponential Fitness |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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