Correlation Between EZFL Old and CurrentC Power

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

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

Diversification Opportunities for EZFL Old and CurrentC Power

-0.47

Correlation Coefficient

EZFL Old  CurrentC Power

Very good diversification

The 3 months correlation between EZFL and CurrentC is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding EZFL Old and CurrentC Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CurrentC Power and EZFL Old 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 EZFL Old are associated (or correlated) with CurrentC Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CurrentC Power has no effect on the direction of EZFL Old i.e., EZFL Old and CurrentC Power go up and down completely randomly.

Pair Corralation between EZFL Old and CurrentC Power

Given the investment horizon of 90 days EZFL Old is expected to generate 54.44 times less return on investment than CurrentC Power. But when comparing it to its historical volatility, EZFL Old is 14.56 times less risky than CurrentC Power. It trades about 0.06 of its potential returns per unit of risk. CurrentC Power is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  8.60  in CurrentC Power on December 29, 2024 and sell it today you would lose (6.85) from holding CurrentC Power or give up 79.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	51.61%
Values	Daily Returns

EZFL Old  vs.  CurrentC Power

EZFL Old

Risk-Adjusted Performance

Insignificant

Over the last 90 days EZFL Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite conflicting technical and fundamental indicators, EZFL Old disclosed solid returns over the last few months and may actually be approaching a breakup point.

CurrentC Power

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CurrentC Power are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, CurrentC Power showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EZFL Old and CurrentC Power

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

The idea behind EZFL Old and CurrentC Power 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.