Correlation Between Eve Holding and HEICO
Can any of the company-specific risk be diversified away by investing in both Eve Holding and HEICO 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 Eve Holding and HEICO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eve Holding and HEICO, you can compare the effects of market volatilities on Eve Holding and HEICO 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 Eve Holding with a short position of HEICO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eve Holding and HEICO.
Diversification Opportunities for Eve Holding and HEICO
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eve and HEICO is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Eve Holding and HEICO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEICO and Eve Holding 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 Eve Holding are associated (or correlated) with HEICO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEICO has no effect on the direction of Eve Holding i.e., Eve Holding and HEICO go up and down completely randomly.
Pair Corralation between Eve Holding and HEICO
Given the investment horizon of 90 days Eve Holding is expected to under-perform the HEICO. In addition to that, Eve Holding is 3.99 times more volatile than HEICO. It trades about 0.0 of its total potential returns per unit of risk. HEICO is currently generating about 0.09 per unit of volatility. If you would invest 18,580 in HEICO on November 3, 2024 and sell it today you would earn a total of 453.00 from holding HEICO or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eve Holding vs. HEICO
Performance |
| Timeline |
| Eve Holding |
| HEICO |
Eve Holding and HEICO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eve Holding and HEICO
The main advantage of trading using opposite Eve Holding and HEICO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eve Holding position performs unexpectedly, HEICO 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 HEICO will offset losses from the drop in HEICO's long position.| Eve Holding vs. Heico | Eve Holding vs. Mercury Systems | Eve Holding vs. AeroVironment | Eve Holding vs. Howmet Aerospace |
| HEICO vs. Vertical Aerospace | HEICO vs. Rolls Royce Holdings plc | HEICO vs. Embraer SA ADR | HEICO vs. Rocket Lab USA |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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