Correlation Between EVS Broadcast and BEL Small
Can any of the company-specific risk be diversified away by investing in both EVS Broadcast and BEL Small 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 EVS Broadcast and BEL Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EVS Broadcast Equipment and BEL Small, you can compare the effects of market volatilities on EVS Broadcast and BEL Small 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 EVS Broadcast with a short position of BEL Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVS Broadcast and BEL Small.
Diversification Opportunities for EVS Broadcast and BEL Small
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between EVS and BEL is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and BEL Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEL Small and EVS Broadcast 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 EVS Broadcast Equipment are associated (or correlated) with BEL Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEL Small has no effect on the direction of EVS Broadcast i.e., EVS Broadcast and BEL Small go up and down completely randomly.
Pair Corralation between EVS Broadcast and BEL Small
Assuming the 90 days trading horizon EVS Broadcast Equipment is expected to generate 2.93 times more return on investment than BEL Small. However, EVS Broadcast is 2.93 times more volatile than BEL Small. It trades about 0.07 of its potential returns per unit of risk. BEL Small is currently generating about -0.61 per unit of risk. If you would invest 2,873 in EVS Broadcast Equipment on August 29, 2024 and sell it today you would earn a total of 72.00 from holding EVS Broadcast Equipment or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EVS Broadcast Equipment vs. BEL Small
Performance |
| Timeline |
EVS Broadcast and BEL Small Volatility Contrast
Predicted Return Density |
| Returns |
EVS Broadcast Equipment
Pair trading matchups for EVS Broadcast
BEL Small
Pair trading matchups for BEL Small
Pair Trading with EVS Broadcast and BEL Small
The main advantage of trading using opposite EVS Broadcast and BEL Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVS Broadcast position performs unexpectedly, BEL Small 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 BEL Small will offset losses from the drop in BEL Small's long position.| EVS Broadcast vs. Vastned Retail Belgium | EVS Broadcast vs. Immolease Trust NV | EVS Broadcast vs. Keyware Technologies NV | EVS Broadcast vs. Retail Estates |
| BEL Small vs. EVS Broadcast Equipment | BEL Small vs. Onward Medical NV | BEL Small vs. Immolease Trust NV | BEL Small vs. Home Invest Belgium |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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