Correlation Between A10 Network and Evertec

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Can any of the company-specific risk be diversified away by investing in both A10 Network 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 A10 Network and Evertec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A10 Network and Evertec, you can compare the effects of market volatilities on A10 Network 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 A10 Network with a short position of Evertec. Check out your portfolio center. Please also check ongoing floating volatility patterns of A10 Network and Evertec.

Diversification Opportunities for A10 Network and Evertec

A10EvertecDiversified AwayA10EvertecDiversified Away100%
-0.55
  Correlation Coefficient

Excellent diversification

The 3 months correlation between A10 and Evertec is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding A10 Network and Evertec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evertec and A10 Network 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 A10 Network 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 A10 Network i.e., A10 Network and Evertec go up and down completely randomly.

Pair Corralation between A10 Network and Evertec

Given the investment horizon of 90 days A10 Network is expected to generate 1.9 times more return on investment than Evertec. However, A10 Network is 1.9 times more volatile than Evertec. It trades about 0.14 of its potential returns per unit of risk. Evertec is currently generating about 0.11 per unit of risk. If you would invest  1,922  in A10 Network on November 25, 2024 and sell it today you would earn a total of  109.00  from holding A10 Network or generate 5.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

A10 Network  vs.  Evertec

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0102030
JavaScript chart by amCharts 3.21.15ATEN EVTC
       Timeline  
A10 Network 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in A10 Network are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady technical and fundamental indicators, A10 Network displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb171819202122
Evertec 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Evertec has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb323334353637

A10 Network and Evertec Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.15-3.86-2.56-1.27-0.02161.42.834.255.68 0.050.100.150.20
JavaScript chart by amCharts 3.21.15ATEN EVTC
       Returns  

Pair Trading with A10 Network and Evertec

The main advantage of trading using opposite A10 Network and Evertec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A10 Network 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.
The idea behind A10 Network and Evertec 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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