Correlation Between LQwD FinTech and EzFill Holdings

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

By analyzing existing cross correlation between LQwD FinTech Corp and EzFill Holdings, you can compare the effects of market volatilities on LQwD FinTech and EzFill 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 LQwD FinTech with a short position of EzFill Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of LQwD FinTech and EzFill Holdings.

Diversification Opportunities for LQwD FinTech and EzFill Holdings

-0.54

Correlation Coefficient

LQwD FinTech  EzFill Holdings

Excellent diversification

The 3 months correlation between LQwD and EzFill is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding LQwD FinTech Corp and EzFill Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EzFill Holdings and LQwD FinTech 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 LQwD FinTech Corp are associated (or correlated) with EzFill Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EzFill Holdings has no effect on the direction of LQwD FinTech i.e., LQwD FinTech and EzFill Holdings go up and down completely randomly.

Pair Corralation between LQwD FinTech and EzFill Holdings

Assuming the 90 days horizon LQwD FinTech Corp is expected to generate 1.83 times more return on investment than EzFill Holdings. However, LQwD FinTech is 1.83 times more volatile than EzFill Holdings. It trades about 0.21 of its potential returns per unit of risk. EzFill Holdings is currently generating about -0.08 per unit of risk. If you would invest  44.00  in LQwD FinTech Corp on September 1, 2024 and sell it today you would earn a total of  64.00  from holding LQwD FinTech Corp or generate 145.45% return on investment over 90 days.

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

LQwD FinTech Corp  vs.  EzFill Holdings

LQwD FinTech Corp

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in LQwD FinTech Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal fundamental indicators, LQwD FinTech reported solid returns over the last few months and may actually be approaching a breakup point.

EzFill Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EzFill Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with LQwD FinTech and EzFill Holdings

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

The idea behind LQwD FinTech Corp and EzFill 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.