Correlation Between Microvast Holdings and Expion360

Can any of the company-specific risk be diversified away by investing in both Microvast Holdings and Expion360 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 Microvast Holdings and Expion360 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Microvast Holdings and Expion360, you can compare the effects of market volatilities on Microvast Holdings and Expion360 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 Microvast Holdings with a short position of Expion360. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microvast Holdings and Expion360.

Diversification Opportunities for Microvast Holdings and Expion360

-0.49

Correlation Coefficient

Microvast Holdings  Expion360

Very good diversification

The 3 months correlation between Microvast and Expion360 is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Microvast Holdings and Expion360 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expion360 and Microvast Holdings 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 Microvast Holdings are associated (or correlated) with Expion360. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expion360 has no effect on the direction of Microvast Holdings i.e., Microvast Holdings and Expion360 go up and down completely randomly.

Pair Corralation between Microvast Holdings and Expion360

Given the investment horizon of 90 days Microvast Holdings is expected to generate 3.03 times more return on investment than Expion360. However, Microvast Holdings is 3.03 times more volatile than Expion360. It trades about 0.13 of its potential returns per unit of risk. Expion360 is currently generating about -0.04 per unit of risk. If you would invest  28.00  in Microvast Holdings on September 16, 2024 and sell it today you would earn a total of  99.00  from holding Microvast Holdings or generate 353.57% return on investment over 90 days.

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

Microvast Holdings  vs.  Expion360

Microvast Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Microvast Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Microvast Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Expion360

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Expion360 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 basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Microvast Holdings and Expion360

The main advantage of trading using opposite Microvast Holdings and Expion360 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microvast Holdings position performs unexpectedly, Expion360 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 Expion360 will offset losses from the drop in Expion360's long position.

The idea behind Microvast Holdings and Expion360 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.