Correlation Between Ezgo Technologies and Fox Factory

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

Diversification Opportunities for Ezgo Technologies and Fox Factory

0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Ezgo Technologies and Fox Factory is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ezgo Technologies and Fox Factory Cp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fox Factory Cp 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 Fox Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fox Factory Cp has no effect on the direction of Ezgo Technologies i.e., Ezgo Technologies and Fox Factory go up and down completely randomly.

Pair Corralation between Ezgo Technologies and Fox Factory

Given the investment horizon of 90 days Ezgo Technologies is expected to under-perform the Fox Factory. In addition to that, Ezgo Technologies is 2.01 times more volatile than Fox Factory Cp. It trades about -0.12 of its total potential returns per unit of risk. Fox Factory Cp is currently generating about 0.01 per unit of volatility. If you would invest  8,702  in Fox Factory Cp on July 3, 2022 and sell it today you would lose (794.00)  from holding Fox Factory Cp or give up 9.12% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy85.54%
ValuesDaily Returns

Ezgo Technologies  vs.  Fox Factory Cp

 Performance (%) 
       Timeline  
Ezgo Technologies 
Ezgo Technologies Performance
0 of 100
Over the last 90 days Ezgo Technologies 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 November 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Ezgo Technologies Price Channel

Fox Factory Cp 
Fox Factory Performance
0 of 100
Over the last 90 days Fox Factory Cp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Fox Factory is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Fox Factory Price Channel

Ezgo Technologies and Fox Factory Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ezgo Technologies and Fox Factory

The main advantage of trading using opposite Ezgo Technologies and Fox Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ezgo Technologies position performs unexpectedly, Fox Factory 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 Fox Factory will offset losses from the drop in Fox Factory's long position.
Ezgo Technologies vs. Amazon Inc
The idea behind Ezgo Technologies and Fox Factory Cp 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.
Fox Factory vs. Amazon Inc
Check out your portfolio center. 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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