Correlation Between Meso Numismatics and EVgo Equity

Can any of the company-specific risk be diversified away by investing in both Meso Numismatics and EVgo Equity 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 Meso Numismatics and EVgo Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Meso Numismatics and EVgo Equity Warrants, you can compare the effects of market volatilities on Meso Numismatics and EVgo Equity 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 Meso Numismatics with a short position of EVgo Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meso Numismatics and EVgo Equity.

Diversification Opportunities for Meso Numismatics and EVgo Equity

0.27

Correlation Coefficient

Meso Numismatics  EVgo Equity

Modest diversification

The 3 months correlation between Meso and EVgo is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Meso Numismatics and EVgo Equity Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVgo Equity Warrants and Meso Numismatics 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 Meso Numismatics are associated (or correlated) with EVgo Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVgo Equity Warrants has no effect on the direction of Meso Numismatics i.e., Meso Numismatics and EVgo Equity go up and down completely randomly.

Pair Corralation between Meso Numismatics and EVgo Equity

Given the investment horizon of 90 days Meso Numismatics is expected to generate 2.05 times more return on investment than EVgo Equity. However, Meso Numismatics is 2.05 times more volatile than EVgo Equity Warrants. It trades about -0.05 of its potential returns per unit of risk. EVgo Equity Warrants is currently generating about -0.41 per unit of risk. If you would invest  3.00  in Meso Numismatics on October 15, 2024 and sell it today you would lose (0.90) from holding Meso Numismatics or give up 30.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	77.78%
Values	Daily Returns

Meso Numismatics  vs.  EVgo Equity Warrants

Meso Numismatics

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Meso Numismatics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, Meso Numismatics showed solid returns over the last few months and may actually be approaching a breakup point.

EVgo Equity Warrants

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EVgo Equity Warrants has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Meso Numismatics and EVgo Equity

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

The idea behind Meso Numismatics and EVgo Equity Warrants 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.