Correlation Between Eve Holding and Triumph
Can any of the company-specific risk be diversified away by investing in both Eve Holding and Triumph 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 Triumph into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eve Holding and Triumph Group, you can compare the effects of market volatilities on Eve Holding and Triumph 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 Triumph. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eve Holding and Triumph.
Diversification Opportunities for Eve Holding and Triumph
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eve and Triumph is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Eve Holding and Triumph Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triumph Group 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 Triumph. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triumph Group has no effect on the direction of Eve Holding i.e., Eve Holding and Triumph go up and down completely randomly.
Pair Corralation between Eve Holding and Triumph
Given the investment horizon of 90 days Eve Holding is expected to under-perform the Triumph. But the stock apears to be less risky and, when comparing its historical volatility, Eve Holding is 1.15 times less risky than Triumph. The stock trades about -0.01 of its potential returns per unit of risk. The Triumph Group is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,471 in Triumph Group on August 24, 2024 and sell it today you would earn a total of 456.00 from holding Triumph Group or generate 31.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eve Holding vs. Triumph Group
Performance |
| Timeline |
| Eve Holding |
| Triumph Group |
Eve Holding and Triumph Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eve Holding and Triumph
The main advantage of trading using opposite Eve Holding and Triumph positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eve Holding position performs unexpectedly, Triumph 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 Triumph will offset losses from the drop in Triumph's long position.| Eve Holding vs. Coca Cola Consolidated | Eve Holding vs. Koppers Holdings | Eve Holding vs. Coca Cola Femsa SAB | Eve Holding vs. Know Labs |
| Triumph vs. Mercury Systems | Triumph vs. Curtiss Wright | Triumph vs. Hexcel | Triumph vs. Ducommun Incorporated |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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