Correlation Between Model N and EzFill Holdings

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

By analyzing existing cross correlation between Model N and EzFill Holdings, you can compare the effects of market volatilities on Model N and EzFill Holdings 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 Model N with a short position of EzFill Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Model N and EzFill Holdings.

Diversification Opportunities for Model N and EzFill Holdings

0.55

Correlation Coefficient

Model N  EzFill Holdings

Very weak diversification

The 3 months correlation between Model and EzFill is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Model N and EzFill Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EzFill Holdings and Model N 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 Model N are associated (or correlated) with EzFill Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EzFill Holdings has no effect on the direction of Model N i.e., Model N and EzFill Holdings go up and down completely randomly.

Pair Corralation between Model N and EzFill Holdings

Given the investment horizon of 90 days Model N is expected to generate 2.6 times less return on investment than EzFill Holdings. But when comparing it to its historical volatility, Model N is 2.76 times less risky than EzFill Holdings. It trades about 0.22 of its potential returns per unit of risk. EzFill Holdings is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  153.00  in EzFill Holdings on February 2, 2024 and sell it today you would earn a total of  83.00  from holding EzFill Holdings or generate 54.25% return on investment over 90 days.

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

Model N  vs.  EzFill Holdings

Model N

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Model N are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Model N may actually be approaching a critical reversion point that can send shares even higher in June 2024.

EzFill Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EzFill Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, EzFill Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Model N and EzFill Holdings

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

The idea behind Model N and EzFill Holdings 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.