Correlation Between EZGO Technologies and Connexa Sports

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

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

Diversification Opportunities for EZGO Technologies and Connexa Sports

0.78

Correlation Coefficient

EZGO Technologies  Connexa Sports

Poor diversification

The 3 months correlation between EZGO and Connexa is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding EZGO Technologies and Connexa Sports Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Connexa Sports Techn 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 Connexa Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Connexa Sports Techn has no effect on the direction of EZGO Technologies i.e., EZGO Technologies and Connexa Sports go up and down completely randomly.

Pair Corralation between EZGO Technologies and Connexa Sports

Given the investment horizon of 90 days EZGO Technologies is expected to generate 0.5 times more return on investment than Connexa Sports. However, EZGO Technologies is 2.0 times less risky than Connexa Sports. It trades about -0.26 of its potential returns per unit of risk. Connexa Sports Technologies is currently generating about -0.31 per unit of risk. If you would invest  120.00  in EZGO Technologies on October 25, 2024 and sell it today you would lose (70.87) from holding EZGO Technologies or give up 59.06% of portfolio value over 90 days.

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

EZGO Technologies  vs.  Connexa Sports Technologies

EZGO Technologies

Risk-Adjusted Performance

0 of 100

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 February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Connexa Sports Techn

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Connexa Sports Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with EZGO Technologies and Connexa Sports

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

The idea behind EZGO Technologies and Connexa Sports 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.