Correlation Between American Defense and Eve Holding
Can any of the company-specific risk be diversified away by investing in both American Defense and Eve Holding 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 American Defense and Eve Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Defense Systems and Eve Holding, you can compare the effects of market volatilities on American Defense and Eve Holding 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 American Defense with a short position of Eve Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Defense and Eve Holding.
Diversification Opportunities for American Defense and Eve Holding
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Eve is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Defense Systems and Eve Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eve Holding and American Defense 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 American Defense Systems are associated (or correlated) with Eve Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eve Holding has no effect on the direction of American Defense i.e., American Defense and Eve Holding go up and down completely randomly.
Pair Corralation between American Defense and Eve Holding
If you would invest 339.00 in Eve Holding on August 27, 2024 and sell it today you would lose (4.00) from holding Eve Holding or give up 1.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
American Defense Systems vs. Eve Holding
Performance |
| Timeline |
| American Defense Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Eve Holding |
American Defense and Eve Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Defense and Eve Holding
The main advantage of trading using opposite American Defense and Eve Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Defense position performs unexpectedly, Eve Holding 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 Eve Holding will offset losses from the drop in Eve Holding's long position.| American Defense vs. PME Inc | American Defense vs. Electro Optic Systems | American Defense vs. Astronics Corp Cl | American Defense vs. V2X Inc |
| Eve Holding vs. Heico | Eve Holding vs. Mercury Systems | Eve Holding vs. AeroVironment | Eve Holding vs. Howmet Aerospace |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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