Correlation Between EVgo Equity and Kandi Technologies

Can any of the company-specific risk be diversified away by investing in both EVgo Equity and Kandi 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 EVgo Equity and Kandi Technologies 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 Kandi Technologies Group, you can compare the effects of market volatilities on EVgo Equity and Kandi 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 EVgo Equity with a short position of Kandi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVgo Equity and Kandi Technologies.

Diversification Opportunities for EVgo Equity and Kandi Technologies

0.14

Correlation Coefficient

EVgo Equity  Kandi Technologies

Average diversification

The 3 months correlation between EVgo and Kandi is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding EVgo Equity Warrants and Kandi Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandi Technologies 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 Kandi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kandi Technologies has no effect on the direction of EVgo Equity i.e., EVgo Equity and Kandi Technologies go up and down completely randomly.

Pair Corralation between EVgo Equity and Kandi Technologies

Assuming the 90 days horizon EVgo Equity Warrants is expected to generate 3.67 times more return on investment than Kandi Technologies. However, EVgo Equity is 3.67 times more volatile than Kandi Technologies Group. It trades about 0.05 of its potential returns per unit of risk. Kandi Technologies Group is currently generating about -0.04 per unit of risk. If you would invest  62.00  in EVgo Equity Warrants on October 5, 2024 and sell it today you would earn a total of  3.51  from holding EVgo Equity Warrants or generate 5.66% return on investment over 90 days.

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

EVgo Equity Warrants  vs.  Kandi Technologies Group

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.

Kandi Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kandi Technologies Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with EVgo Equity and Kandi Technologies

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

The idea behind EVgo Equity Warrants and Kandi Technologies Group 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.