Correlation Between H2O Retailing and EVS Broadcast
Can any of the company-specific risk be diversified away by investing in both H2O Retailing and EVS Broadcast 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 H2O Retailing and EVS Broadcast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H2O Retailing and EVS Broadcast Equipment, you can compare the effects of market volatilities on H2O Retailing and EVS Broadcast 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 H2O Retailing with a short position of EVS Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of H2O Retailing and EVS Broadcast.
Diversification Opportunities for H2O Retailing and EVS Broadcast
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between H2O and EVS is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding H2O Retailing and EVS Broadcast Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVS Broadcast Equipment and H2O Retailing 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 H2O Retailing are associated (or correlated) with EVS Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVS Broadcast Equipment has no effect on the direction of H2O Retailing i.e., H2O Retailing and EVS Broadcast go up and down completely randomly.
Pair Corralation between H2O Retailing and EVS Broadcast
Assuming the 90 days horizon H2O Retailing is expected to generate 1.04 times more return on investment than EVS Broadcast. However, H2O Retailing is 1.04 times more volatile than EVS Broadcast Equipment. It trades about 0.01 of its potential returns per unit of risk. EVS Broadcast Equipment is currently generating about -0.07 per unit of risk. If you would invest 1,380 in H2O Retailing on October 30, 2024 and sell it today you would earn a total of 0.00 from holding H2O Retailing or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
H2O Retailing vs. EVS Broadcast Equipment
Performance |
| Timeline |
| H2O Retailing |
| EVS Broadcast Equipment |
H2O Retailing and EVS Broadcast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H2O Retailing and EVS Broadcast
The main advantage of trading using opposite H2O Retailing and EVS Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H2O Retailing position performs unexpectedly, EVS Broadcast 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 EVS Broadcast will offset losses from the drop in EVS Broadcast's long position.| H2O Retailing vs. SHOPRITE HDGS ADR | H2O Retailing vs. Superior Plus Corp | H2O Retailing vs. Origin Agritech | H2O Retailing vs. Identiv |
| EVS Broadcast vs. Apple Inc | EVS Broadcast vs. Apple Inc | EVS Broadcast vs. Apple Inc | EVS Broadcast vs. Apple Inc |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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