Correlation Between FirstCash and Evercore Partners
Can any of the company-specific risk be diversified away by investing in both FirstCash and Evercore Partners 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 FirstCash and Evercore Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FirstCash and Evercore Partners, you can compare the effects of market volatilities on FirstCash and Evercore Partners 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 FirstCash with a short position of Evercore Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of FirstCash and Evercore Partners.
Diversification Opportunities for FirstCash and Evercore Partners
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FirstCash and Evercore is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding FirstCash and Evercore Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evercore Partners and FirstCash 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 FirstCash are associated (or correlated) with Evercore Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evercore Partners has no effect on the direction of FirstCash i.e., FirstCash and Evercore Partners go up and down completely randomly.
Pair Corralation between FirstCash and Evercore Partners
Given the investment horizon of 90 days FirstCash is expected to under-perform the Evercore Partners. In addition to that, FirstCash is 1.28 times more volatile than Evercore Partners. It trades about -0.02 of its total potential returns per unit of risk. Evercore Partners is currently generating about -0.02 per unit of volatility. If you would invest 30,102 in Evercore Partners on September 14, 2024 and sell it today you would lose (162.00) from holding Evercore Partners or give up 0.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FirstCash vs. Evercore Partners
Performance |
| Timeline |
| FirstCash |
| Evercore Partners |
FirstCash and Evercore Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FirstCash and Evercore Partners
The main advantage of trading using opposite FirstCash and Evercore Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstCash position performs unexpectedly, Evercore Partners 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 Evercore Partners will offset losses from the drop in Evercore Partners' long position.| FirstCash vs. Visa Class A | FirstCash vs. PayPal Holdings | FirstCash vs. Upstart Holdings | FirstCash vs. Mastercard |
| Evercore Partners vs. PJT Partners | Evercore Partners vs. Moelis Co | Evercore Partners vs. Perella Weinberg Partners | Evercore Partners vs. Jefferies Financial Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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