Correlation Between EVS Broadcast and Walmart
Can any of the company-specific risk be diversified away by investing in both EVS Broadcast and Walmart 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 EVS Broadcast and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EVS Broadcast Equipment and Walmart, you can compare the effects of market volatilities on EVS Broadcast and Walmart 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 EVS Broadcast with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVS Broadcast and Walmart.
Diversification Opportunities for EVS Broadcast and Walmart
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EVS and Walmart is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and EVS Broadcast 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 EVS Broadcast Equipment are associated (or correlated) with Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of EVS Broadcast i.e., EVS Broadcast and Walmart go up and down completely randomly.
Pair Corralation between EVS Broadcast and Walmart
Assuming the 90 days trading horizon EVS Broadcast is expected to generate 6.66 times less return on investment than Walmart. But when comparing it to its historical volatility, EVS Broadcast Equipment is 9.74 times less risky than Walmart. It trades about 0.06 of its potential returns per unit of risk. Walmart is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,328 in Walmart on October 16, 2024 and sell it today you would earn a total of 1,632 from holding Walmart or generate 37.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.73% |
| Values | Daily Returns |
EVS Broadcast Equipment vs. Walmart
Performance |
| Timeline |
| EVS Broadcast Equipment |
| Walmart |
EVS Broadcast and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVS Broadcast and Walmart
The main advantage of trading using opposite EVS Broadcast and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVS Broadcast position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart's long position.| EVS Broadcast vs. Teradata Corp | EVS Broadcast vs. Silver Bullet Data | EVS Broadcast vs. Monks Investment Trust | EVS Broadcast vs. Rosslyn Data Technologies |
| Walmart vs. Premier Foods PLC | Walmart vs. EVS Broadcast Equipment | Walmart vs. MTI Wireless Edge | Walmart vs. Zoom Video Communications |
Check out your portfolio center.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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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