Correlation Between EZGO Technologies and JAKKS Pacific

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

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

Diversification Opportunities for EZGO Technologies and JAKKS Pacific

-0.74

Correlation Coefficient

EZGO Technologies  JAKKS Pacific

Pay attention - limited upside

The 3 months correlation between EZGO and JAKKS is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding EZGO Technologies and JAKKS Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAKKS Pacific and EZGO 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 EZGO Technologies are associated (or correlated) with JAKKS Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAKKS Pacific has no effect on the direction of EZGO Technologies i.e., EZGO Technologies and JAKKS Pacific go up and down completely randomly.

Pair Corralation between EZGO Technologies and JAKKS Pacific

Given the investment horizon of 90 days EZGO Technologies is expected to under-perform the JAKKS Pacific. In addition to that, EZGO Technologies is 1.85 times more volatile than JAKKS Pacific. It trades about -0.11 of its total potential returns per unit of risk. JAKKS Pacific is currently generating about 0.1 per unit of volatility. If you would invest  2,389  in JAKKS Pacific on September 4, 2024 and sell it today you would earn a total of  439.00  from holding JAKKS Pacific or generate 18.38% return on investment over 90 days.

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

EZGO Technologies  vs.  JAKKS Pacific

EZGO Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EZGO Technologies 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 technical and fundamental 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.

JAKKS Pacific

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JAKKS Pacific are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating forward-looking signals, JAKKS Pacific disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EZGO Technologies and JAKKS Pacific

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

The idea behind EZGO Technologies and JAKKS Pacific 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.