Correlation Between Floor Decor and Evgo
Can any of the company-specific risk be diversified away by investing in both Floor Decor and Evgo 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 Floor Decor and Evgo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Floor Decor Holdings and Evgo Inc, you can compare the effects of market volatilities on Floor Decor and Evgo 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 Floor Decor with a short position of Evgo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floor Decor and Evgo.
Diversification Opportunities for Floor Decor and Evgo
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Floor and Evgo is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Floor Decor Holdings and Evgo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evgo Inc and Floor Decor 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 Floor Decor Holdings are associated (or correlated) with Evgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evgo Inc has no effect on the direction of Floor Decor i.e., Floor Decor and Evgo go up and down completely randomly.
Pair Corralation between Floor Decor and Evgo
Considering the 90-day investment horizon Floor Decor Holdings is expected to generate 0.59 times more return on investment than Evgo. However, Floor Decor Holdings is 1.71 times less risky than Evgo. It trades about 0.18 of its potential returns per unit of risk. Evgo Inc is currently generating about -0.2 per unit of risk. If you would invest 10,184 in Floor Decor Holdings on August 29, 2024 and sell it today you would earn a total of 1,291 from holding Floor Decor Holdings or generate 12.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Floor Decor Holdings vs. Evgo Inc
Performance |
| Timeline |
| Floor Decor Holdings |
| Evgo Inc |
Floor Decor and Evgo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Floor Decor and Evgo
The main advantage of trading using opposite Floor Decor and Evgo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floor Decor position performs unexpectedly, Evgo 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 Evgo will offset losses from the drop in Evgo's long position.| Floor Decor vs. Arhaus Inc | Floor Decor vs. Haverty Furniture Companies | Floor Decor vs. Kirklands | Floor Decor vs. Haverty Furniture Companies |
| Evgo vs. Kingsway Financial Services | Evgo vs. KAR Auction Services | Evgo vs. Cango Inc | Evgo vs. Vroom Inc |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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