Correlation Between EZGO Technologies and Rocky Brands
Can any of the company-specific risk be diversified away by investing in both EZGO Technologies and Rocky Brands 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 Rocky Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EZGO Technologies and Rocky Brands, you can compare the effects of market volatilities on EZGO Technologies and Rocky Brands 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 Rocky Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of EZGO Technologies and Rocky Brands.
Diversification Opportunities for EZGO Technologies and Rocky Brands
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EZGO and Rocky is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding EZGO Technologies and Rocky Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocky Brands 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 Rocky Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocky Brands has no effect on the direction of EZGO Technologies i.e., EZGO Technologies and Rocky Brands go up and down completely randomly.
Pair Corralation between EZGO Technologies and Rocky Brands
Given the investment horizon of 90 days EZGO Technologies is expected to under-perform the Rocky Brands. In addition to that, EZGO Technologies is 1.91 times more volatile than Rocky Brands. It trades about -0.01 of its total potential returns per unit of risk. Rocky Brands is currently generating about 0.01 per unit of volatility. If you would invest 2,566 in Rocky Brands on August 27, 2024 and sell it today you would lose (384.00) from holding Rocky Brands or give up 14.96% 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. Rocky Brands
Performance |
| Timeline |
| EZGO Technologies |
| Rocky Brands |
EZGO Technologies and Rocky Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EZGO Technologies and Rocky Brands
The main advantage of trading using opposite EZGO Technologies and Rocky Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EZGO Technologies position performs unexpectedly, Rocky Brands 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 Rocky Brands will offset losses from the drop in Rocky Brands' long position.| EZGO Technologies vs. Vision Marine Technologies | EZGO Technologies vs. Marine Products | EZGO Technologies vs. Thor Industries | EZGO Technologies vs. BRP Inc |
| Rocky Brands vs. Vera Bradley | Rocky Brands vs. Steven Madden | Rocky Brands vs. Wolverine World Wide | Rocky Brands vs. Caleres |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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