Correlation Between EVgo Equity and Chardan NexTech

Can any of the company-specific risk be diversified away by investing in both EVgo Equity and Chardan NexTech 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 Chardan NexTech 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 Chardan NexTech Acquisition, you can compare the effects of market volatilities on EVgo Equity and Chardan NexTech 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 Chardan NexTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVgo Equity and Chardan NexTech.

Diversification Opportunities for EVgo Equity and Chardan NexTech

0.59

Correlation Coefficient

EVgo Equity  Chardan NexTech

Very weak diversification

The 3 months correlation between EVgo and Chardan is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding EVgo Equity Warrants and Chardan NexTech Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chardan NexTech Acqu 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 Chardan NexTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chardan NexTech Acqu has no effect on the direction of EVgo Equity i.e., EVgo Equity and Chardan NexTech go up and down completely randomly.

Pair Corralation between EVgo Equity and Chardan NexTech

Assuming the 90 days horizon EVgo Equity Warrants is expected to under-perform the Chardan NexTech. In addition to that, EVgo Equity is 1.4 times more volatile than Chardan NexTech Acquisition. It trades about -0.28 of its total potential returns per unit of risk. Chardan NexTech Acquisition is currently generating about -0.03 per unit of volatility. If you would invest  359.00  in Chardan NexTech Acquisition on October 8, 2024 and sell it today you would lose (24.00) from holding Chardan NexTech Acquisition or give up 6.69% of portfolio value over 90 days.

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

EVgo Equity Warrants  vs.  Chardan NexTech Acquisition

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 fairly stable basic indicators, EVgo Equity is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Chardan NexTech Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chardan NexTech Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with EVgo Equity and Chardan NexTech

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

The idea behind EVgo Equity Warrants and Chardan NexTech Acquisition 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.