Correlation Between Eguana Technologies and Axion Power

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

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

Diversification Opportunities for Eguana Technologies and Axion Power

0.0

Correlation Coefficient

Eguana Technologies  Axion Power

Pay attention - limited upside

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

Pair Corralation between Eguana Technologies and Axion Power

If you would invest  1.00  in Eguana Technologies on December 29, 2024 and sell it today you would lose (0.15) from holding Eguana Technologies or give up 15.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Eguana Technologies  vs.  Axion Power International

Eguana Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eguana Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Eguana Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Axion Power International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Axion Power International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Axion Power is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Eguana Technologies and Axion Power

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

The idea behind Eguana Technologies and Axion Power International 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.