Correlation Between EVI Industries and Oil States
Can any of the company-specific risk be diversified away by investing in both EVI Industries and Oil States 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 EVI Industries and Oil States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EVI Industries and Oil States International, you can compare the effects of market volatilities on EVI Industries and Oil States 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 EVI Industries with a short position of Oil States. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVI Industries and Oil States.
Diversification Opportunities for EVI Industries and Oil States
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between EVI and Oil is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding EVI Industries and Oil States International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oil States International and EVI Industries 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 EVI Industries are associated (or correlated) with Oil States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oil States International has no effect on the direction of EVI Industries i.e., EVI Industries and Oil States go up and down completely randomly.
Pair Corralation between EVI Industries and Oil States
Considering the 90-day investment horizon EVI Industries is expected to generate 5.18 times less return on investment than Oil States. In addition to that, EVI Industries is 1.33 times more volatile than Oil States International. It trades about 0.01 of its total potential returns per unit of risk. Oil States International is currently generating about 0.09 per unit of volatility. If you would invest 410.00 in Oil States International on September 3, 2024 and sell it today you would earn a total of 148.00 from holding Oil States International or generate 36.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EVI Industries vs. Oil States International
Performance |
| Timeline |
| EVI Industries |
| Oil States International |
EVI Industries and Oil States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVI Industries and Oil States
The main advantage of trading using opposite EVI Industries and Oil States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVI Industries position performs unexpectedly, Oil States 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 Oil States will offset losses from the drop in Oil States' long position.| EVI Industries vs. DXP Enterprises | EVI Industries vs. Global Industrial Co | EVI Industries vs. Core Main | EVI Industries vs. Watsco Inc |
| Oil States vs. Oceaneering International | Oil States vs. ChampionX | Oil States vs. TechnipFMC PLC | Oil States vs. Helix Energy Solutions |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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