Correlation Between EVgo Equity and Grab Holdings

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

Diversification Opportunities for EVgo Equity and Grab Holdings

-0.26

Correlation Coefficient

EVgo Equity  Grab Holdings

Very good diversification

The 3 months correlation between EVgo and Grab is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding EVgo Equity Warrants and Grab Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grab Holdings Limited 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 Grab Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grab Holdings Limited has no effect on the direction of EVgo Equity i.e., EVgo Equity and Grab Holdings go up and down completely randomly.

Pair Corralation between EVgo Equity and Grab Holdings

Assuming the 90 days horizon EVgo Equity Warrants is expected to under-perform the Grab Holdings. But the stock apears to be less risky and, when comparing its historical volatility, EVgo Equity Warrants is 1.21 times less risky than Grab Holdings. The stock trades about -0.14 of its potential returns per unit of risk. The Grab Holdings Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  44.00  in Grab Holdings Limited on December 27, 2024 and sell it today you would earn a total of  5.00  from holding Grab Holdings Limited or generate 11.36% return on investment over 90 days.

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

EVgo Equity Warrants  vs.  Grab Holdings Limited

EVgo Equity Warrants

Risk-Adjusted Performance

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

Grab Holdings Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grab Holdings Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Grab Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EVgo Equity and Grab Holdings

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

The idea behind EVgo Equity Warrants and Grab Holdings Limited 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.

Check out your portfolio center.

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.