Correlation Between Eve Holding and Thales SA
Can any of the company-specific risk be diversified away by investing in both Eve Holding and Thales SA 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 Thales SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eve Holding and Thales SA, you can compare the effects of market volatilities on Eve Holding and Thales SA 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 Thales SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eve Holding and Thales SA.
Diversification Opportunities for Eve Holding and Thales SA
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eve and Thales is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Eve Holding and Thales SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thales SA 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 Thales SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thales SA has no effect on the direction of Eve Holding i.e., Eve Holding and Thales SA go up and down completely randomly.
Pair Corralation between Eve Holding and Thales SA
Given the investment horizon of 90 days Eve Holding is expected to generate 4.36 times more return on investment than Thales SA. However, Eve Holding is 4.36 times more volatile than Thales SA. It trades about 0.28 of its potential returns per unit of risk. Thales SA is currently generating about -0.42 per unit of risk. If you would invest 308.00 in Eve Holding on September 1, 2024 and sell it today you would earn a total of 111.00 from holding Eve Holding or generate 36.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eve Holding vs. Thales SA
Performance |
| Timeline |
| Eve Holding |
| Thales SA |
Eve Holding and Thales SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eve Holding and Thales SA
The main advantage of trading using opposite Eve Holding and Thales SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eve Holding position performs unexpectedly, Thales SA 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 Thales SA will offset losses from the drop in Thales SA's long position.| Eve Holding vs. Heico | Eve Holding vs. Mercury Systems | Eve Holding vs. AeroVironment | Eve Holding vs. Howmet Aerospace |
| Thales SA vs. Firan Technology Group | Thales SA vs. 808 Renewable Energy | Thales SA vs. Park Electrochemical | Thales SA vs. Innovative Solutions and |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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