Correlation Between EVS Broadcast and Compagnie
Can any of the company-specific risk be diversified away by investing in both EVS Broadcast and Compagnie 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 Compagnie 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 Compagnie d Entreprises, you can compare the effects of market volatilities on EVS Broadcast and Compagnie 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 Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVS Broadcast and Compagnie.
Diversification Opportunities for EVS Broadcast and Compagnie
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EVS and Compagnie is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and Compagnie d Entreprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie d Entreprises 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 Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie d Entreprises has no effect on the direction of EVS Broadcast i.e., EVS Broadcast and Compagnie go up and down completely randomly.
Pair Corralation between EVS Broadcast and Compagnie
Assuming the 90 days trading horizon EVS Broadcast Equipment is expected to generate 0.85 times more return on investment than Compagnie. However, EVS Broadcast Equipment is 1.18 times less risky than Compagnie. It trades about -0.04 of its potential returns per unit of risk. Compagnie d Entreprises is currently generating about -0.21 per unit of risk. If you would invest 2,962 in EVS Broadcast Equipment on August 26, 2024 and sell it today you would lose (97.00) from holding EVS Broadcast Equipment or give up 3.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EVS Broadcast Equipment vs. Compagnie d Entreprises
Performance |
| Timeline |
| EVS Broadcast Equipment |
| Compagnie d Entreprises |
EVS Broadcast and Compagnie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVS Broadcast and Compagnie
The main advantage of trading using opposite EVS Broadcast and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVS Broadcast position performs unexpectedly, Compagnie 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 Compagnie will offset losses from the drop in Compagnie's long position.| EVS Broadcast vs. Retail Estates | EVS Broadcast vs. Vastned Retail Belgium | EVS Broadcast vs. Home Invest Belgium | EVS Broadcast vs. Ion Beam Applications |
| Compagnie vs. NV Bekaert SA | Compagnie vs. Tessenderlo | Compagnie vs. Barco NV | Compagnie vs. EVS Broadcast Equipment |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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