Correlation Between EVS Broadcast and Van De
Can any of the company-specific risk be diversified away by investing in both EVS Broadcast and Van De 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 Van De 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 Van de Velde, you can compare the effects of market volatilities on EVS Broadcast and Van De 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 Van De. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVS Broadcast and Van De.
Diversification Opportunities for EVS Broadcast and Van De
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EVS and Van is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and Van de Velde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Van de Velde 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 Van De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Van de Velde has no effect on the direction of EVS Broadcast i.e., EVS Broadcast and Van De go up and down completely randomly.
Pair Corralation between EVS Broadcast and Van De
Assuming the 90 days trading horizon EVS Broadcast Equipment is expected to generate 1.14 times more return on investment than Van De. However, EVS Broadcast is 1.14 times more volatile than Van de Velde. It trades about 0.07 of its potential returns per unit of risk. Van de Velde is currently generating about 0.0 per unit of risk. If you would invest 1,890 in EVS Broadcast Equipment on August 26, 2024 and sell it today you would earn a total of 975.00 from holding EVS Broadcast Equipment or generate 51.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EVS Broadcast Equipment vs. Van de Velde
Performance |
| Timeline |
| EVS Broadcast Equipment |
| Van de Velde |
EVS Broadcast and Van De Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVS Broadcast and Van De
The main advantage of trading using opposite EVS Broadcast and Van De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVS Broadcast position performs unexpectedly, Van De 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 Van De will offset losses from the drop in Van De's long position.The idea behind EVS Broadcast Equipment and Van de Velde 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.| Van De vs. EVS Broadcast Equipment | Van De vs. NV Bekaert SA | Van De vs. Tessenderlo | Van De vs. Melexis NV |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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