Correlation Between EZGO Technologies and Turtle Beach

Can any of the company-specific risk be diversified away by investing in both EZGO Technologies and Turtle Beach 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 Turtle Beach into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EZGO Technologies and Turtle Beach Corp, you can compare the effects of market volatilities on EZGO Technologies and Turtle Beach 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 Turtle Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of EZGO Technologies and Turtle Beach.

Diversification Opportunities for EZGO Technologies and Turtle Beach

-0.67

Correlation Coefficient

EZGO Technologies  Turtle Beach

Excellent diversification

The 3 months correlation between EZGO and Turtle is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding EZGO Technologies and Turtle Beach Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turtle Beach Corp 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 Turtle Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turtle Beach Corp has no effect on the direction of EZGO Technologies i.e., EZGO Technologies and Turtle Beach go up and down completely randomly.

Pair Corralation between EZGO Technologies and Turtle Beach

Given the investment horizon of 90 days EZGO Technologies is expected to generate 6.76 times more return on investment than Turtle Beach. However, EZGO Technologies is 6.76 times more volatile than Turtle Beach Corp. It trades about -0.04 of its potential returns per unit of risk. Turtle Beach Corp is currently generating about -0.63 per unit of risk. If you would invest  236.00  in EZGO Technologies on February 2, 2024 and sell it today you would lose (45.00) from holding EZGO Technologies or give up 19.07% of portfolio value over 90 days.

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

EZGO Technologies  vs.  Turtle Beach Corp

EZGO Technologies

Risk-Adjusted Performance

0 of 100

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 unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Turtle Beach Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Turtle Beach Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Turtle Beach reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EZGO Technologies and Turtle Beach

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

The idea behind EZGO Technologies and Turtle Beach Corp 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 Global Correlations module to find global opportunities by holding instruments from different markets.