Correlation Between Franchise and EVgo Equity
Can any of the company-specific risk be diversified away by investing in both Franchise and EVgo Equity 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 Franchise and EVgo Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franchise Group and EVgo Equity Warrants, you can compare the effects of market volatilities on Franchise and EVgo Equity 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 Franchise with a short position of EVgo Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franchise and EVgo Equity.
Diversification Opportunities for Franchise and EVgo Equity
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franchise and EVgo is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Franchise Group and EVgo Equity Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVgo Equity Warrants and Franchise 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 Franchise Group are associated (or correlated) with EVgo Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVgo Equity Warrants has no effect on the direction of Franchise i.e., Franchise and EVgo Equity go up and down completely randomly.
Pair Corralation between Franchise and EVgo Equity
Considering the 90-day investment horizon Franchise is expected to generate 13.52 times less return on investment than EVgo Equity. But when comparing it to its historical volatility, Franchise Group is 25.56 times less risky than EVgo Equity. It trades about 0.11 of its potential returns per unit of risk. EVgo Equity Warrants is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 63.00 in EVgo Equity Warrants on August 31, 2024 and sell it today you would earn a total of 47.00 from holding EVgo Equity Warrants or generate 74.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 8.56% |
| Values | Daily Returns |
Franchise Group vs. EVgo Equity Warrants
Performance |
| Timeline |
| Franchise Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| EVgo Equity Warrants |
Franchise and EVgo Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franchise and EVgo Equity
The main advantage of trading using opposite Franchise and EVgo Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franchise position performs unexpectedly, EVgo Equity 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 Equity will offset losses from the drop in EVgo Equity's long position.| Franchise vs. Mega Uranium | Franchise vs. Laramide Resources | Franchise vs. NXG NextGen Infrastructure | Franchise vs. Pinetree Capital |
| EVgo Equity vs. Nuvve Holding Corp | EVgo Equity vs. Paysafe Ltd Wt | EVgo Equity vs. Canoo Holdings | EVgo Equity vs. Microvast Holdings |
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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