Correlation Between EZGO Technologies and On Holding
Can any of the company-specific risk be diversified away by investing in both EZGO Technologies and On Holding 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 On Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EZGO Technologies and On Holding, you can compare the effects of market volatilities on EZGO Technologies and On Holding 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 On Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of EZGO Technologies and On Holding.
Diversification Opportunities for EZGO Technologies and On Holding
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between EZGO and ONON is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding EZGO Technologies and On Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on On Holding 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 On Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of On Holding has no effect on the direction of EZGO Technologies i.e., EZGO Technologies and On Holding go up and down completely randomly.
Pair Corralation between EZGO Technologies and On Holding
Given the investment horizon of 90 days EZGO Technologies is expected to generate 1.18 times more return on investment than On Holding. However, EZGO Technologies is 1.18 times more volatile than On Holding. It trades about 0.04 of its potential returns per unit of risk. On Holding is currently generating about -0.42 per unit of risk. If you would invest 51.00 in EZGO Technologies on December 1, 2024 and sell it today you would earn a total of 1.00 from holding EZGO Technologies or generate 1.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
EZGO Technologies vs. On Holding
Performance |
Timeline |
EZGO Technologies |
On Holding |
EZGO Technologies and On Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EZGO Technologies and On Holding
The main advantage of trading using opposite EZGO Technologies and On Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EZGO Technologies position performs unexpectedly, On Holding 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 On Holding will offset losses from the drop in On Holding's long position.EZGO Technologies vs. Vision Marine Technologies | EZGO Technologies vs. Marine Products | EZGO Technologies vs. Thor Industries | EZGO Technologies vs. BRP Inc |
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Check out your portfolio center.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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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