Correlation Between J Long and Evgo
Can any of the company-specific risk be diversified away by investing in both J Long 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 J Long and Evgo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Long Group Limited and Evgo Inc, you can compare the effects of market volatilities on J Long 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 J Long with a short position of Evgo. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Long and Evgo.
Diversification Opportunities for J Long and Evgo
Pay attention - limited upside
The 3 months correlation between J Long and Evgo is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding J Long Group Limited and Evgo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evgo Inc and J Long 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 J Long Group Limited 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 J Long i.e., J Long and Evgo go up and down completely randomly.
Pair Corralation between J Long and Evgo
Allowing for the 90-day total investment horizon J Long Group Limited is expected to under-perform the Evgo. In addition to that, J Long is 1.63 times more volatile than Evgo Inc. It trades about -0.06 of its total potential returns per unit of risk. Evgo Inc is currently generating about 0.05 per unit of volatility. If you would invest 253.00 in Evgo Inc on November 8, 2024 and sell it today you would earn a total of 83.00 from holding Evgo Inc or generate 32.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Long Group Limited vs. Evgo Inc
Performance |
| Timeline |
| J Long Group |
| Evgo Inc |
J Long and Evgo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Long and Evgo
The main advantage of trading using opposite J Long and Evgo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Long 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.The idea behind J Long Group Limited and Evgo Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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