Correlation Between EVgo Equity and Boqii Holding

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

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

Diversification Opportunities for EVgo Equity and Boqii Holding

0.5

Correlation Coefficient

EVgo Equity  Boqii Holding

Very weak diversification

The 3 months correlation between EVgo and Boqii is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding EVgo Equity Warrants and Boqii Holding Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boqii Holding Limited and EVgo Equity 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 EVgo Equity Warrants are associated (or correlated) with Boqii Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boqii Holding Limited has no effect on the direction of EVgo Equity i.e., EVgo Equity and Boqii Holding go up and down completely randomly.

Pair Corralation between EVgo Equity and Boqii Holding

Assuming the 90 days horizon EVgo Equity Warrants is expected to under-perform the Boqii Holding. But the stock apears to be less risky and, when comparing its historical volatility, EVgo Equity Warrants is 1.6 times less risky than Boqii Holding. The stock trades about -0.03 of its potential returns per unit of risk. The Boqii Holding Limited is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  191.00  in Boqii Holding Limited on January 29, 2024 and sell it today you would lose (161.00) from holding Boqii Holding Limited or give up 84.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

EVgo Equity Warrants  vs.  Boqii Holding Limited

EVgo Equity Warrants

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EVgo Equity Warrants has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Boqii Holding Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boqii Holding Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with EVgo Equity and Boqii Holding

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

The idea behind EVgo Equity Warrants and Boqii Holding Limited 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.