Correlation Between EVN AG and BRIT AMER
Can any of the company-specific risk be diversified away by investing in both EVN AG and BRIT AMER 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 EVN AG and BRIT AMER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EVN AG and BRIT AMER TOBACCO, you can compare the effects of market volatilities on EVN AG and BRIT AMER 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 EVN AG with a short position of BRIT AMER. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVN AG and BRIT AMER.
Diversification Opportunities for EVN AG and BRIT AMER
Significant diversification
The 3 months correlation between EVN and BRIT is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding EVN AG and BRIT AMER TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRIT AMER TOBACCO and EVN AG 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 EVN AG are associated (or correlated) with BRIT AMER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRIT AMER TOBACCO has no effect on the direction of EVN AG i.e., EVN AG and BRIT AMER go up and down completely randomly.
Pair Corralation between EVN AG and BRIT AMER
Assuming the 90 days horizon EVN AG is expected to under-perform the BRIT AMER. In addition to that, EVN AG is 1.1 times more volatile than BRIT AMER TOBACCO. It trades about -0.01 of its total potential returns per unit of risk. BRIT AMER TOBACCO is currently generating about 0.13 per unit of volatility. If you would invest 2,552 in BRIT AMER TOBACCO on December 4, 2024 and sell it today you would earn a total of 1,221 from holding BRIT AMER TOBACCO or generate 47.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EVN AG vs. BRIT AMER TOBACCO
Performance |
| Timeline |
| EVN AG |
| BRIT AMER TOBACCO |
EVN AG and BRIT AMER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVN AG and BRIT AMER
The main advantage of trading using opposite EVN AG and BRIT AMER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVN AG position performs unexpectedly, BRIT AMER 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 BRIT AMER will offset losses from the drop in BRIT AMER's long position.| EVN AG vs. International Consolidated Airlines | EVN AG vs. Singapore Airlines Limited | EVN AG vs. China Southern Airlines | EVN AG vs. Aegean Airlines SA |
| BRIT AMER vs. EITZEN CHEMICALS | BRIT AMER vs. TIANDE CHEMICAL | BRIT AMER vs. X FAB Silicon Foundries | BRIT AMER vs. COMPUTER MODELLING |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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