Correlation Between Smart Powerr and EVgo Equity

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

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

Diversification Opportunities for Smart Powerr and EVgo Equity

0.59

Correlation Coefficient

Smart Powerr  EVgo Equity

Very weak diversification

The 3 months correlation between Smart and EVgo is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Smart Powerr Corp 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 Smart Powerr 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 Smart Powerr Corp 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 Smart Powerr i.e., Smart Powerr and EVgo Equity go up and down completely randomly.

Pair Corralation between Smart Powerr and EVgo Equity

Given the investment horizon of 90 days Smart Powerr Corp is expected to under-perform the EVgo Equity. But the stock apears to be less risky and, when comparing its historical volatility, Smart Powerr Corp is 1.71 times less risky than EVgo Equity. The stock trades about -0.04 of its potential returns per unit of risk. The EVgo Equity Warrants is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  29.00  in EVgo Equity Warrants on March 11, 2025 and sell it today you would lose (1.00) from holding EVgo Equity Warrants or give up 3.45% of portfolio value over 90 days.

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

Smart Powerr Corp  vs.  EVgo Equity Warrants

Smart Powerr Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Smart Powerr Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in July 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

EVgo Equity Warrants

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in EVgo Equity Warrants are ranked lower than 2 (%) 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 Smart Powerr and EVgo Equity

The main advantage of trading using opposite Smart Powerr and EVgo Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smart Powerr 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 Smart Powerr Corp 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.

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 the Money Managers module to screen money managers from public funds and ETFs managed around the world.