Correlation Between BEL Small and EVS Broadcast
Can any of the company-specific risk be diversified away by investing in both BEL Small and EVS Broadcast 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 BEL Small and EVS Broadcast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BEL Small and EVS Broadcast Equipment, you can compare the effects of market volatilities on BEL Small and EVS Broadcast 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 BEL Small with a short position of EVS Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEL Small and EVS Broadcast.
Diversification Opportunities for BEL Small and EVS Broadcast
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BEL and EVS is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding BEL Small and EVS Broadcast Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVS Broadcast Equipment and BEL Small 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 BEL Small are associated (or correlated) with EVS Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVS Broadcast Equipment has no effect on the direction of BEL Small i.e., BEL Small and EVS Broadcast go up and down completely randomly.
Pair Corralation between BEL Small and EVS Broadcast
Assuming the 90 days trading horizon BEL Small is expected to under-perform the EVS Broadcast. But the index apears to be less risky and, when comparing its historical volatility, BEL Small is 1.94 times less risky than EVS Broadcast. The index trades about -0.1 of its potential returns per unit of risk. The EVS Broadcast Equipment is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,047 in EVS Broadcast Equipment on August 31, 2024 and sell it today you would earn a total of 808.00 from holding EVS Broadcast Equipment or generate 39.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
BEL Small vs. EVS Broadcast Equipment
Performance |
| Timeline |
BEL Small and EVS Broadcast Volatility Contrast
Predicted Return Density |
| Returns |
BEL Small
Pair trading matchups for BEL Small
EVS Broadcast Equipment
Pair trading matchups for EVS Broadcast
Pair Trading with BEL Small and EVS Broadcast
The main advantage of trading using opposite BEL Small and EVS Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEL Small position performs unexpectedly, EVS Broadcast 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 EVS Broadcast will offset losses from the drop in EVS Broadcast's long position.| BEL Small vs. Vastned Retail Belgium | BEL Small vs. Retail Estates | BEL Small vs. Home Invest Belgium | BEL Small vs. Shurgard Self Storage |
| EVS Broadcast vs. Retail Estates | EVS Broadcast vs. Shurgard Self Storage | EVS Broadcast vs. Onward Medical NV | EVS Broadcast vs. Ion Beam Applications |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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