Correlation Between Expion360 and Microvast Holdings

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

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

Diversification Opportunities for Expion360 and Microvast Holdings

0.7

Correlation Coefficient

Expion360  Microvast Holdings

Poor diversification

The 3 months correlation between Expion360 and Microvast is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Expion360 and Microvast Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microvast Holdings 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 Microvast Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microvast Holdings has no effect on the direction of Expion360 i.e., Expion360 and Microvast Holdings go up and down completely randomly.

Pair Corralation between Expion360 and Microvast Holdings

Given the investment horizon of 90 days Expion360 is expected to under-perform the Microvast Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Expion360 is 1.59 times less risky than Microvast Holdings. The stock trades about -0.34 of its potential returns per unit of risk. The Microvast Holdings is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  275.00  in Microvast Holdings on December 30, 2024 and sell it today you would lose (160.00) from holding Microvast Holdings or give up 58.18% of portfolio value over 90 days.

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

Expion360  vs.  Microvast Holdings

Expion360

Risk-Adjusted Performance

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 April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Microvast Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Microvast Holdings 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 comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Expion360 and Microvast Holdings

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

The idea behind Expion360 and Microvast Holdings 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.