Correlation Between Mechanics Bank and Exro Technologies

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

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

Diversification Opportunities for Mechanics Bank and Exro Technologies

0.0

Correlation Coefficient

Mechanics Bank  Exro Technologies

Pay attention - limited upside

The 3 months correlation between Mechanics and Exro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mechanics Bank and Exro Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exro Technologies and Mechanics Bank 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 Mechanics Bank are associated (or correlated) with Exro Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exro Technologies has no effect on the direction of Mechanics Bank i.e., Mechanics Bank and Exro Technologies go up and down completely randomly.

Pair Corralation between Mechanics Bank and Exro Technologies

If you would invest (100.00) in Mechanics Bank on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Mechanics Bank or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Mechanics Bank  vs.  Exro Technologies

Mechanics Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mechanics Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical indicators, Mechanics Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Mechanics Bank and Exro Technologies

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

The idea behind Mechanics Bank and Exro 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.