Correlation Between Xos and EVgo Equity

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Can any of the company-specific risk be diversified away by investing in both Xos 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 Xos and EVgo Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xos Inc and EVgo Equity Warrants, you can compare the effects of market volatilities on Xos 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 Xos with a short position of EVgo Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xos and EVgo Equity.

Diversification Opportunities for Xos and EVgo Equity

XosEVgoDiversified AwayXosEVgoDiversified Away100%
0.52
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Xos and EVgo is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Xos Inc 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 Xos 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 Xos Inc 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 Xos i.e., Xos and EVgo Equity go up and down completely randomly.

Pair Corralation between Xos and EVgo Equity

Considering the 90-day investment horizon Xos Inc is expected to generate 2.7 times more return on investment than EVgo Equity. However, Xos is 2.7 times more volatile than EVgo Equity Warrants. It trades about 0.2 of its potential returns per unit of risk. EVgo Equity Warrants is currently generating about 0.11 per unit of risk. If you would invest  317.00  in Xos Inc on November 23, 2024 and sell it today you would earn a total of  283.00  from holding Xos Inc or generate 89.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Xos Inc  vs.  EVgo Equity Warrants

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -60-40-200204060
JavaScript chart by amCharts 3.21.15XOS EVGOW
       Timeline  
Xos Inc 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Xos Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Xos unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3456789
EVgo Equity Warrants 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days EVgo Equity Warrants has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in March 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.40.60.811.2

Xos and EVgo Equity Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-40.83-30.58-20.33-10.08-0.1710.0520.6331.2241.852.38 0.00250.00300.00350.00400.0045
JavaScript chart by amCharts 3.21.15XOS EVGOW
       Returns  

Pair Trading with Xos and EVgo Equity

The main advantage of trading using opposite Xos and EVgo Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xos 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.
The idea behind Xos Inc and EVgo Equity Warrants 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.
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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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