Correlation Between Expion360 and Chardan NexTech

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

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

Diversification Opportunities for Expion360 and Chardan NexTech

0.37

Correlation Coefficient

Expion360  Chardan NexTech

Weak diversification

The 3 months correlation between Expion360 and Chardan is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Expion360 and Chardan NexTech Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chardan NexTech Acqu and Expion360 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 Expion360 are associated (or correlated) with Chardan NexTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chardan NexTech Acqu has no effect on the direction of Expion360 i.e., Expion360 and Chardan NexTech go up and down completely randomly.

Pair Corralation between Expion360 and Chardan NexTech

Given the investment horizon of 90 days Expion360 is expected to under-perform the Chardan NexTech. In addition to that, Expion360 is 2.11 times more volatile than Chardan NexTech Acquisition. It trades about -0.04 of its total potential returns per unit of risk. Chardan NexTech Acquisition is currently generating about -0.07 per unit of volatility. If you would invest  512.00  in Chardan NexTech Acquisition on September 16, 2024 and sell it today you would lose (192.00) from holding Chardan NexTech Acquisition or give up 37.5% of portfolio value over 90 days.

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

Expion360  vs.  Chardan NexTech Acquisition

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.

Chardan NexTech Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chardan NexTech Acquisition 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 essential indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Expion360 and Chardan NexTech

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

The idea behind Expion360 and Chardan NexTech Acquisition 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.