Correlation Between PVH Corp and EZGO Technologies

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Can any of the company-specific risk be diversified away by investing in both PVH Corp and EZGO Technologies 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 PVH Corp and EZGO Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PVH Corp and EZGO Technologies, you can compare the effects of market volatilities on PVH Corp and EZGO Technologies 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 PVH Corp with a short position of EZGO Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of PVH Corp and EZGO Technologies.

Diversification Opportunities for PVH Corp and EZGO Technologies

-0.63
  Correlation Coefficient

Excellent diversification

The 3 months correlation between PVH and EZGO is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding PVH Corp and EZGO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EZGO Technologies and PVH Corp 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 PVH Corp are associated (or correlated) with EZGO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EZGO Technologies has no effect on the direction of PVH Corp i.e., PVH Corp and EZGO Technologies go up and down completely randomly.

Pair Corralation between PVH Corp and EZGO Technologies

Considering the 90-day investment horizon PVH Corp is expected to generate 0.52 times more return on investment than EZGO Technologies. However, PVH Corp is 1.93 times less risky than EZGO Technologies. It trades about 0.19 of its potential returns per unit of risk. EZGO Technologies is currently generating about -0.2 per unit of risk. If you would invest  9,883  in PVH Corp on August 30, 2024 and sell it today you would earn a total of  805.00  from holding PVH Corp or generate 8.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy95.65%
ValuesDaily Returns

PVH Corp  vs.  EZGO Technologies

 Performance 
       Timeline  
PVH Corp 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in PVH Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, PVH Corp may actually be approaching a critical reversion point that can send shares even higher in December 2024.
EZGO Technologies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

PVH Corp and EZGO Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PVH Corp and EZGO Technologies

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

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