Correlation Between Exro Technologies and Eguana Technologies

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

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

Diversification Opportunities for Exro Technologies and Eguana Technologies

0.29

Correlation Coefficient

Exro Technologies  Eguana Technologies

Modest diversification

The 3 months correlation between Exro and Eguana is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Exro Technologies and Eguana Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eguana Technologies and Exro Technologies 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 Exro Technologies are associated (or correlated) with Eguana Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eguana Technologies has no effect on the direction of Exro Technologies i.e., Exro Technologies and Eguana Technologies go up and down completely randomly.

Pair Corralation between Exro Technologies and Eguana Technologies

Assuming the 90 days trading horizon Exro Technologies is expected to under-perform the Eguana Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Exro Technologies is 6.01 times less risky than Eguana Technologies. The stock trades about -0.04 of its potential returns per unit of risk. The Eguana Technologies is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1.00  in Eguana Technologies on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Eguana Technologies or generate 0.0% return on investment over 90 days.

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

Exro Technologies  vs.  Eguana Technologies

Exro Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exro Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Eguana Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eguana Technologies are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Eguana Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exro Technologies and Eguana Technologies

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

The idea behind Exro Technologies and Eguana Technologies 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.