Correlation Between Eguana Technologies and Exro Technologies

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

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

Diversification Opportunities for Eguana Technologies and Exro Technologies

0.0

Correlation Coefficient

Eguana Technologies  Exro Technologies

Pay attention - limited upside

The 3 months correlation between Eguana and Exro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eguana Technologies and Exro Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exro Technologies and Eguana Technologies 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 Eguana Technologies are associated (or correlated) with Exro Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exro Technologies has no effect on the direction of Eguana Technologies i.e., Eguana Technologies and Exro Technologies go up and down completely randomly.

Pair Corralation between Eguana Technologies and Exro Technologies

If you would invest  13.00  in Exro Technologies on September 4, 2024 and sell it today you would earn a total of  3.00  from holding Exro Technologies or generate 23.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Eguana Technologies  vs.  Exro Technologies

Eguana Technologies

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Eguana Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Eguana Technologies is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Exro Technologies

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Exro Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Eguana Technologies and Exro Technologies

The main advantage of trading using opposite Eguana Technologies and Exro Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eguana Technologies position performs unexpectedly, Exro Technologies 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 Exro Technologies will offset losses from the drop in Exro Technologies' long position.

The idea behind Eguana Technologies and Exro Technologies 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.