Correlation Between Evertec and Steer Technologies
Can any of the company-specific risk be diversified away by investing in both Evertec and Steer Technologies 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 Steer Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evertec and Steer Technologies, you can compare the effects of market volatilities on Evertec and Steer Technologies 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 Steer Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evertec and Steer Technologies.
Diversification Opportunities for Evertec and Steer Technologies
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Evertec and Steer is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Evertec and Steer Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steer Technologies 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 Steer Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steer Technologies has no effect on the direction of Evertec i.e., Evertec and Steer Technologies go up and down completely randomly.
Pair Corralation between Evertec and Steer Technologies
Given the investment horizon of 90 days Evertec is expected to under-perform the Steer Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Evertec is 1.19 times less risky than Steer Technologies. The stock trades about -0.01 of its potential returns per unit of risk. The Steer Technologies is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,319 in Steer Technologies on September 4, 2024 and sell it today you would earn a total of 355.00 from holding Steer Technologies or generate 26.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.09% |
| Values | Daily Returns |
Evertec vs. Steer Technologies
Performance |
| Timeline |
| Evertec |
| Steer Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Evertec and Steer Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evertec and Steer Technologies
The main advantage of trading using opposite Evertec and Steer Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evertec position performs unexpectedly, Steer Technologies 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 Steer Technologies will offset losses from the drop in Steer Technologies' long position.| Evertec vs. Consensus Cloud Solutions | Evertec vs. Global Blue Group | Evertec vs. EverCommerce | Evertec vs. CSG Systems International |
| Steer Technologies vs. EverCommerce | Steer Technologies vs. Evertec | Steer Technologies vs. Consensus Cloud Solutions | Steer Technologies vs. CSG Systems International |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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