Correlation Between Evertec and Rekor Systems
Can any of the company-specific risk be diversified away by investing in both Evertec and Rekor Systems 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 Evertec and Rekor Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evertec and Rekor Systems, you can compare the effects of market volatilities on Evertec and Rekor Systems 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 Evertec with a short position of Rekor Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evertec and Rekor Systems.
Diversification Opportunities for Evertec and Rekor Systems
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Evertec and Rekor is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Evertec and Rekor Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rekor Systems and Evertec 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 Evertec are associated (or correlated) with Rekor Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rekor Systems has no effect on the direction of Evertec i.e., Evertec and Rekor Systems go up and down completely randomly.
Pair Corralation between Evertec and Rekor Systems
Given the investment horizon of 90 days Evertec is expected to under-perform the Rekor Systems. But the stock apears to be less risky and, when comparing its historical volatility, Evertec is 7.55 times less risky than Rekor Systems. The stock trades about -0.09 of its potential returns per unit of risk. The Rekor Systems is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 163.00 in Rekor Systems on November 9, 2024 and sell it today you would earn a total of 86.00 from holding Rekor Systems or generate 52.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evertec vs. Rekor Systems
Performance |
| Timeline |
| Evertec |
| Rekor Systems |
Evertec and Rekor Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evertec and Rekor Systems
The main advantage of trading using opposite Evertec and Rekor Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evertec position performs unexpectedly, Rekor Systems 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 Rekor Systems will offset losses from the drop in Rekor Systems' long position.| Evertec vs. Consensus Cloud Solutions | Evertec vs. Global Blue Group | Evertec vs. EverCommerce | Evertec vs. CSG Systems International |
| Rekor Systems vs. Aurora Mobile | Rekor Systems vs. Arqit Quantum | Rekor Systems vs. Bridgeline Digital | Rekor Systems vs. Repay Holdings Corp |
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 Stocks Directory module to find actively traded stocks across global markets.
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