Correlation Between EVS Broadcast and Roku
Can any of the company-specific risk be diversified away by investing in both EVS Broadcast and Roku 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 Roku 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 Roku Inc, you can compare the effects of market volatilities on EVS Broadcast and Roku 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 Roku. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVS Broadcast and Roku.
Diversification Opportunities for EVS Broadcast and Roku
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EVS and Roku is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and Roku Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roku Inc 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 Roku. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roku Inc has no effect on the direction of EVS Broadcast i.e., EVS Broadcast and Roku go up and down completely randomly.
Pair Corralation between EVS Broadcast and Roku
Assuming the 90 days trading horizon EVS Broadcast is expected to generate 1.65 times less return on investment than Roku. But when comparing it to its historical volatility, EVS Broadcast Equipment is 2.44 times less risky than Roku. It trades about 0.06 of its potential returns per unit of risk. Roku Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,111 in Roku Inc on November 2, 2024 and sell it today you would earn a total of 3,112 from holding Roku Inc or generate 60.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EVS Broadcast Equipment vs. Roku Inc
Performance |
| Timeline |
| EVS Broadcast Equipment |
| Roku Inc |
EVS Broadcast and Roku Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVS Broadcast and Roku
The main advantage of trading using opposite EVS Broadcast and Roku positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVS Broadcast position performs unexpectedly, Roku 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 Roku will offset losses from the drop in Roku's long position.| EVS Broadcast vs. Titan Machinery | EVS Broadcast vs. Daito Trust Construction | EVS Broadcast vs. FARM 51 GROUP | EVS Broadcast vs. Granite Construction |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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