Correlation Between NeoVolta Warrant and Exro Technologies

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

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

Diversification Opportunities for NeoVolta Warrant and Exro Technologies

0.6

Correlation Coefficient

NeoVolta Warrant  Exro Technologies

Poor diversification

The 3 months correlation between NeoVolta and Exro is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding NeoVolta Warrant and Exro Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exro Technologies and NeoVolta Warrant 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 NeoVolta Warrant 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 NeoVolta Warrant i.e., NeoVolta Warrant and Exro Technologies go up and down completely randomly.

Pair Corralation between NeoVolta Warrant and Exro Technologies

Assuming the 90 days horizon NeoVolta Warrant is expected to under-perform the Exro Technologies. In addition to that, NeoVolta Warrant is 1.75 times more volatile than Exro Technologies. It trades about -0.03 of its total potential returns per unit of risk. Exro Technologies is currently generating about -0.03 per unit of volatility. If you would invest  8.50  in Exro Technologies on December 29, 2024 and sell it today you would lose (1.90) from holding Exro Technologies or give up 22.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

NeoVolta Warrant  vs.  Exro Technologies

NeoVolta Warrant

Risk-Adjusted Performance

Very Weak

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

The main advantage of trading using opposite NeoVolta Warrant and Exro Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NeoVolta Warrant 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 NeoVolta Warrant 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.