Correlation Between Arhaus and Evgo

Can any of the company-specific risk be diversified away by investing in both Arhaus 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 Arhaus and Evgo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Arhaus Inc and Evgo Inc, you can compare the effects of market volatilities on Arhaus 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 Arhaus with a short position of Evgo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arhaus and Evgo.

Diversification Opportunities for Arhaus and Evgo

-0.78

Correlation Coefficient

Arhaus  Evgo

Pay attention - limited upside

The 3 months correlation between Arhaus and Evgo is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Arhaus Inc and Evgo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evgo Inc and Arhaus 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 Arhaus Inc 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 Arhaus i.e., Arhaus and Evgo go up and down completely randomly.

Pair Corralation between Arhaus and Evgo

Given the investment horizon of 90 days Arhaus Inc is expected to under-perform the Evgo. But the stock apears to be less risky and, when comparing its historical volatility, Arhaus Inc is 2.71 times less risky than Evgo. The stock trades about -0.06 of its potential returns per unit of risk. The Evgo Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  417.00  in Evgo Inc on September 2, 2024 and sell it today you would earn a total of  234.00  from holding Evgo Inc or generate 56.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Arhaus Inc  vs.  Evgo Inc

Arhaus Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arhaus Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Evgo Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Evgo Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Evgo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Arhaus and Evgo

The main advantage of trading using opposite Arhaus and Evgo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arhaus 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 Arhaus Inc 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.

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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.