Correlation Between General Dynamics and Eve Holding
Can any of the company-specific risk be diversified away by investing in both General Dynamics and Eve Holding 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 General Dynamics and Eve Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Dynamics and Eve Holding, you can compare the effects of market volatilities on General Dynamics and Eve Holding 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 General Dynamics with a short position of Eve Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Dynamics and Eve Holding.
Diversification Opportunities for General Dynamics and Eve Holding
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between General and Eve is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding General Dynamics and Eve Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eve Holding and General Dynamics 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 General Dynamics are associated (or correlated) with Eve Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eve Holding has no effect on the direction of General Dynamics i.e., General Dynamics and Eve Holding go up and down completely randomly.
Pair Corralation between General Dynamics and Eve Holding
Allowing for the 90-day total investment horizon General Dynamics is expected to under-perform the Eve Holding. But the stock apears to be less risky and, when comparing its historical volatility, General Dynamics is 1.89 times less risky than Eve Holding. The stock trades about -0.18 of its potential returns per unit of risk. The Eve Holding is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 342.00 in Eve Holding on August 24, 2024 and sell it today you would lose (13.00) from holding Eve Holding or give up 3.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Dynamics vs. Eve Holding
Performance |
| Timeline |
| General Dynamics |
| Eve Holding |
General Dynamics and Eve Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Dynamics and Eve Holding
The main advantage of trading using opposite General Dynamics and Eve Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Dynamics position performs unexpectedly, Eve Holding 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 Eve Holding will offset losses from the drop in Eve Holding's long position.| General Dynamics vs. Lockheed Martin | General Dynamics vs. Raytheon Technologies Corp | General Dynamics vs. L3Harris Technologies | General Dynamics vs. Huntington Ingalls Industries |
| Eve Holding vs. Coca Cola Consolidated | Eve Holding vs. Koppers Holdings | Eve Holding vs. Coca Cola Femsa SAB | Eve Holding vs. Know Labs |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |