Correlation Between Power Financial and Exro Technologies

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

By analyzing existing cross correlation between Power Financial Corp and Exro Technologies, you can compare the effects of market volatilities on Power Financial and Exro 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 Power Financial with a short position of Exro Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Financial and Exro Technologies.

Diversification Opportunities for Power Financial and Exro Technologies

-0.71

Correlation Coefficient

Power Financial  Exro Technologies

Pay attention - limited upside

The 3 months correlation between Power and Exro is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Power Financial Corp and Exro Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exro Technologies and Power Financial 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 Power Financial Corp are associated (or correlated) with Exro Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exro Technologies has no effect on the direction of Power Financial i.e., Power Financial and Exro Technologies go up and down completely randomly.

Pair Corralation between Power Financial and Exro Technologies

Assuming the 90 days trading horizon Power Financial Corp is expected to generate 0.06 times more return on investment than Exro Technologies. However, Power Financial Corp is 15.59 times less risky than Exro Technologies. It trades about 0.29 of its potential returns per unit of risk. Exro Technologies is currently generating about -0.12 per unit of risk. If you would invest  2,060  in Power Financial Corp on April 22, 2025 and sell it today you would earn a total of  173.00  from holding Power Financial Corp or generate 8.4% return on investment over 90 days.

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

Power Financial Corp  vs.  Exro Technologies

Power Financial Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Power Financial Corp are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, Power Financial may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Exro Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exro Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Power Financial and Exro Technologies

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

The idea behind Power Financial Corp and Exro 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.