Correlation Between Affirm Holdings and Evertec
Can any of the company-specific risk be diversified away by investing in both Affirm Holdings and Evertec 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 Affirm Holdings and Evertec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affirm Holdings and Evertec, you can compare the effects of market volatilities on Affirm Holdings and Evertec 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 Affirm Holdings with a short position of Evertec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affirm Holdings and Evertec.
Diversification Opportunities for Affirm Holdings and Evertec
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Affirm and Evertec is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Affirm Holdings and Evertec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evertec and Affirm Holdings 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 Affirm Holdings are associated (or correlated) with Evertec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evertec has no effect on the direction of Affirm Holdings i.e., Affirm Holdings and Evertec go up and down completely randomly.
Pair Corralation between Affirm Holdings and Evertec
Given the investment horizon of 90 days Affirm Holdings is expected to generate 3.29 times more return on investment than Evertec. However, Affirm Holdings is 3.29 times more volatile than Evertec. It trades about 0.09 of its potential returns per unit of risk. Evertec is currently generating about 0.03 per unit of risk. If you would invest 1,134 in Affirm Holdings on August 28, 2024 and sell it today you would earn a total of 5,801 from holding Affirm Holdings or generate 511.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affirm Holdings vs. Evertec
Performance |
| Timeline |
| Affirm Holdings |
| Evertec |
Affirm Holdings and Evertec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affirm Holdings and Evertec
The main advantage of trading using opposite Affirm Holdings and Evertec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affirm Holdings position performs unexpectedly, Evertec 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 Evertec will offset losses from the drop in Evertec's long position.| Affirm Holdings vs. Upstart Holdings | Affirm Holdings vs. SoFi Technologies | Affirm Holdings vs. Roblox Corp | Affirm Holdings vs. Robinhood Markets |
| Evertec vs. Consensus Cloud Solutions | Evertec vs. Global Blue Group | Evertec vs. EverCommerce | Evertec vs. CSG Systems International |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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