Correlation Between EVS Broadcast and Oakley Capital

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Can any of the company-specific risk be diversified away by investing in both EVS Broadcast and Oakley Capital 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 Oakley Capital 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 Oakley Capital Investments, you can compare the effects of market volatilities on EVS Broadcast and Oakley Capital 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 Oakley Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVS Broadcast and Oakley Capital.

Diversification Opportunities for EVS Broadcast and Oakley Capital

0.27
  Correlation Coefficient

Modest diversification

The 3 months correlation between EVS and Oakley is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and Oakley Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakley Capital Inves 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 Oakley Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakley Capital Inves has no effect on the direction of EVS Broadcast i.e., EVS Broadcast and Oakley Capital go up and down completely randomly.

Pair Corralation between EVS Broadcast and Oakley Capital

Assuming the 90 days trading horizon EVS Broadcast Equipment is expected to generate 3.47 times more return on investment than Oakley Capital. However, EVS Broadcast is 3.47 times more volatile than Oakley Capital Investments. It trades about -0.02 of its potential returns per unit of risk. Oakley Capital Investments is currently generating about -0.18 per unit of risk. If you would invest  2,890  in EVS Broadcast Equipment on August 31, 2024 and sell it today you would lose (35.00) from holding EVS Broadcast Equipment or give up 1.21% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

EVS Broadcast Equipment  vs.  Oakley Capital Investments

 Performance 
       Timeline  
EVS Broadcast Equipment 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days EVS Broadcast Equipment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, EVS Broadcast is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
Oakley Capital Inves 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Oakley Capital Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

EVS Broadcast and Oakley Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with EVS Broadcast and Oakley Capital

The main advantage of trading using opposite EVS Broadcast and Oakley Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVS Broadcast position performs unexpectedly, Oakley Capital 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 Oakley Capital will offset losses from the drop in Oakley Capital's long position.
The idea behind EVS Broadcast Equipment and Oakley Capital Investments 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 CEOs Directory module to screen CEOs from public companies around the world.

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