Correlation Between EvoAir Holdings and Palfinger

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Can any of the company-specific risk be diversified away by investing in both EvoAir Holdings and Palfinger 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 EvoAir Holdings and Palfinger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EvoAir Holdings and Palfinger AG, you can compare the effects of market volatilities on EvoAir Holdings and Palfinger 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 EvoAir Holdings with a short position of Palfinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of EvoAir Holdings and Palfinger.

Diversification Opportunities for EvoAir Holdings and Palfinger

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between EvoAir and Palfinger is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EvoAir Holdings and Palfinger AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palfinger AG and EvoAir Holdings 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 EvoAir Holdings are associated (or correlated) with Palfinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palfinger AG has no effect on the direction of EvoAir Holdings i.e., EvoAir Holdings and Palfinger go up and down completely randomly.

Pair Corralation between EvoAir Holdings and Palfinger

Assuming the 90 days horizon EvoAir Holdings is expected to generate 1.32 times less return on investment than Palfinger. But when comparing it to its historical volatility, EvoAir Holdings is 7.45 times less risky than Palfinger. It trades about 0.05 of its potential returns per unit of risk. Palfinger AG is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,185  in Palfinger AG on September 2, 2024 and sell it today you would earn a total of  15.00  from holding Palfinger AG or generate 0.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy99.73%
ValuesDaily Returns

EvoAir Holdings  vs.  Palfinger AG

 Performance 
       Timeline  
EvoAir Holdings 

Risk-Adjusted Performance

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Over the last 90 days EvoAir Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, EvoAir Holdings is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
Palfinger AG 

Risk-Adjusted Performance

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Strong
Very Weak
Over the last 90 days Palfinger AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Palfinger is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

EvoAir Holdings and Palfinger Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with EvoAir Holdings and Palfinger

The main advantage of trading using opposite EvoAir Holdings and Palfinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EvoAir Holdings position performs unexpectedly, Palfinger 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 Palfinger will offset losses from the drop in Palfinger's long position.
The idea behind EvoAir Holdings and Palfinger AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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