Correlation Between EVgo Equity and ChargePoint Holdings

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

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

Diversification Opportunities for EVgo Equity and ChargePoint Holdings

0.62

Correlation Coefficient

EVgo Equity  ChargePoint Holdings

Poor diversification

The 3 months correlation between EVgo and ChargePoint is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding EVgo Equity Warrants and ChargePoint Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChargePoint Holdings and EVgo Equity 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 EVgo Equity Warrants are associated (or correlated) with ChargePoint Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChargePoint Holdings has no effect on the direction of EVgo Equity i.e., EVgo Equity and ChargePoint Holdings go up and down completely randomly.

Pair Corralation between EVgo Equity and ChargePoint Holdings

Assuming the 90 days horizon EVgo Equity Warrants is expected to under-perform the ChargePoint Holdings. In addition to that, EVgo Equity is 2.1 times more volatile than ChargePoint Holdings. It trades about -0.41 of its total potential returns per unit of risk. ChargePoint Holdings is currently generating about 0.0 per unit of volatility. If you would invest  113.00  in ChargePoint Holdings on October 15, 2024 and sell it today you would lose (2.00) from holding ChargePoint Holdings or give up 1.77% of portfolio value over 90 days.

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

EVgo Equity Warrants  vs.  ChargePoint Holdings

EVgo Equity Warrants

Risk-Adjusted Performance

0 of 100

Very Weak

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 February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

ChargePoint Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ChargePoint Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with EVgo Equity and ChargePoint Holdings

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

The idea behind EVgo Equity Warrants and ChargePoint Holdings 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.