Correlation Between Blink Charging and EZCORP

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

By analyzing existing cross correlation between Blink Charging Co and EZCORP Inc, you can compare the effects of market volatilities on Blink Charging and EZCORP 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 Blink Charging with a short position of EZCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blink Charging and EZCORP.

Diversification Opportunities for Blink Charging and EZCORP

0.2

Correlation Coefficient

Blink Charging  EZCORP

Modest diversification

The 3 months correlation between Blink and EZCORP is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Blink Charging Co and EZCORP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EZCORP Inc and Blink Charging 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 Blink Charging Co are associated (or correlated) with EZCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EZCORP Inc has no effect on the direction of Blink Charging i.e., Blink Charging and EZCORP go up and down completely randomly.

Pair Corralation between Blink Charging and EZCORP

Given the investment horizon of 90 days Blink Charging Co is expected to under-perform the EZCORP. In addition to that, Blink Charging is 2.2 times more volatile than EZCORP Inc. It trades about -0.1 of its total potential returns per unit of risk. EZCORP Inc is currently generating about 0.1 per unit of volatility. If you would invest  1,108  in EZCORP Inc on January 26, 2024 and sell it today you would earn a total of  42.00  from holding EZCORP Inc or generate 3.79% return on investment over 90 days.

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

Blink Charging Co  vs.  EZCORP Inc

Blink Charging

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blink Charging Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Blink Charging may actually be approaching a critical reversion point that can send shares even higher in May 2024.

EZCORP Inc

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EZCORP Inc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, EZCORP showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blink Charging and EZCORP

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

The idea behind Blink Charging Co and EZCORP Inc 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.