Correlation Between EVS Broadcast and Metro AG
Can any of the company-specific risk be diversified away by investing in both EVS Broadcast and Metro AG 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 Metro AG 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 Metro AG, you can compare the effects of market volatilities on EVS Broadcast and Metro AG 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 Metro AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVS Broadcast and Metro AG.
Diversification Opportunities for EVS Broadcast and Metro AG
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EVS and Metro is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and Metro AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro AG 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 Metro AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro AG has no effect on the direction of EVS Broadcast i.e., EVS Broadcast and Metro AG go up and down completely randomly.
Pair Corralation between EVS Broadcast and Metro AG
Assuming the 90 days trading horizon EVS Broadcast is expected to generate 2.73 times less return on investment than Metro AG. But when comparing it to its historical volatility, EVS Broadcast Equipment is 2.06 times less risky than Metro AG. It trades about 0.05 of its potential returns per unit of risk. Metro AG is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 401.00 in Metro AG on October 13, 2024 and sell it today you would earn a total of 9.00 from holding Metro AG or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
EVS Broadcast Equipment vs. Metro AG
Performance |
| Timeline |
| EVS Broadcast Equipment |
| Metro AG |
EVS Broadcast and Metro AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVS Broadcast and Metro AG
The main advantage of trading using opposite EVS Broadcast and Metro AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVS Broadcast position performs unexpectedly, Metro AG 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 Metro AG will offset losses from the drop in Metro AG's long position.| EVS Broadcast vs. Apple Inc | EVS Broadcast vs. Apple Inc | EVS Broadcast vs. Apple Inc | EVS Broadcast vs. Apple Inc |
| Metro AG vs. US Foods Holding | Metro AG vs. Axfood AB | Metro AG vs. Superior Plus Corp | Metro AG vs. NMI Holdings |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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