Correlation Between Exro Technologies and NeoVolta Warrant

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

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

Diversification Opportunities for Exro Technologies and NeoVolta Warrant

0.6

Correlation Coefficient

Exro Technologies  NeoVolta Warrant

Poor diversification

The 3 months correlation between Exro and NeoVolta is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Exro Technologies and NeoVolta Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeoVolta Warrant 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 NeoVolta Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeoVolta Warrant has no effect on the direction of Exro Technologies i.e., Exro Technologies and NeoVolta Warrant go up and down completely randomly.

Pair Corralation between Exro Technologies and NeoVolta Warrant

Assuming the 90 days horizon Exro Technologies is expected to generate 0.57 times more return on investment than NeoVolta Warrant. However, Exro Technologies is 1.75 times less risky than NeoVolta Warrant. It trades about -0.03 of its potential returns per unit of risk. NeoVolta Warrant is currently generating about -0.03 per unit of risk. If you would invest  8.50  in Exro Technologies on December 29, 2024 and sell it today you would lose (1.90) from holding Exro Technologies or give up 22.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Exro Technologies  vs.  NeoVolta Warrant

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. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

NeoVolta Warrant

Risk-Adjusted Performance

Very Weak

Over the last 90 days NeoVolta Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady 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.

Pair Trading with Exro Technologies and NeoVolta Warrant

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

The idea behind Exro Technologies and NeoVolta Warrant 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.