Correlation Between Aeva Technologies, and EVgo Equity

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

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

Diversification Opportunities for Aeva Technologies, and EVgo Equity

0.24

Correlation Coefficient

Aeva Technologies,  EVgo Equity

Modest diversification

The 3 months correlation between Aeva and EVgo is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Aeva Technologies, WT 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 Aeva Technologies, 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 Aeva Technologies, WT 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 Aeva Technologies, i.e., Aeva Technologies, and EVgo Equity go up and down completely randomly.

Pair Corralation between Aeva Technologies, and EVgo Equity

Assuming the 90 days trading horizon Aeva Technologies, WT is expected to generate 1.79 times more return on investment than EVgo Equity. However, Aeva Technologies, is 1.79 times more volatile than EVgo Equity Warrants. It trades about 0.06 of its potential returns per unit of risk. EVgo Equity Warrants is currently generating about 0.05 per unit of risk. If you would invest  16.00  in Aeva Technologies, WT on September 25, 2024 and sell it today you would lose (10.50) from holding Aeva Technologies, WT or give up 65.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.35%
Values	Daily Returns

Aeva Technologies, WT  vs.  EVgo Equity Warrants

Aeva Technologies,

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aeva Technologies, WT are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Aeva Technologies, unveiled solid returns over the last few months and may actually be approaching a breakup point.

EVgo Equity Warrants

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EVgo Equity Warrants are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, EVgo Equity showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aeva Technologies, and EVgo Equity

The main advantage of trading using opposite Aeva Technologies, and EVgo Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeva Technologies, 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 Aeva Technologies, WT 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.