Correlation Between EVgo Equity and Parkland

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

Diversification Opportunities for EVgo Equity and Parkland

0.51

Correlation Coefficient

EVgo Equity  Parkland

Very weak diversification

The 3 months correlation between EVgo and Parkland is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding EVgo Equity Warrants and Parkland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parkland 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 Parkland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parkland has no effect on the direction of EVgo Equity i.e., EVgo Equity and Parkland go up and down completely randomly.

Pair Corralation between EVgo Equity and Parkland

Assuming the 90 days horizon EVgo Equity Warrants is expected to under-perform the Parkland. In addition to that, EVgo Equity is 7.79 times more volatile than Parkland. It trades about -0.41 of its total potential returns per unit of risk. Parkland is currently generating about -0.32 per unit of volatility. If you would invest  2,442  in Parkland on October 15, 2024 and sell it today you would lose (164.00) from holding Parkland or give up 6.72% 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.  Parkland

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.

Parkland

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Parkland has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with EVgo Equity and Parkland

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

The idea behind EVgo Equity Warrants and Parkland 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.