Correlation Between EZGO Technologies and MCBC Holdings

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

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

Diversification Opportunities for EZGO Technologies and MCBC Holdings

0.42

Correlation Coefficient

EZGO Technologies  MCBC Holdings

Very weak diversification

The 3 months correlation between EZGO and MCBC is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding EZGO Technologies and MCBC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCBC Holdings and EZGO 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 EZGO Technologies are associated (or correlated) with MCBC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCBC Holdings has no effect on the direction of EZGO Technologies i.e., EZGO Technologies and MCBC Holdings go up and down completely randomly.

Pair Corralation between EZGO Technologies and MCBC Holdings

Given the investment horizon of 90 days EZGO Technologies is expected to under-perform the MCBC Holdings. In addition to that, EZGO Technologies is 1.71 times more volatile than MCBC Holdings. It trades about -0.22 of its total potential returns per unit of risk. MCBC Holdings is currently generating about -0.03 per unit of volatility. If you would invest  1,872  in MCBC Holdings on December 27, 2024 and sell it today you would lose (133.00) from holding MCBC Holdings or give up 7.1% of portfolio value over 90 days.

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

EZGO Technologies  vs.  MCBC Holdings

EZGO Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days EZGO Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental 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.

MCBC Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days MCBC Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, MCBC Holdings is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with EZGO Technologies and MCBC Holdings

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

The idea behind EZGO Technologies and MCBC Holdings 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.