Correlation Between Ignitis Grupe and EVS Broadcast
Can any of the company-specific risk be diversified away by investing in both Ignitis Grupe 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 Ignitis Grupe and EVS Broadcast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ignitis Grupe AB and EVS Broadcast Equipment, you can compare the effects of market volatilities on Ignitis Grupe 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 Ignitis Grupe with a short position of EVS Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ignitis Grupe and EVS Broadcast.
Diversification Opportunities for Ignitis Grupe and EVS Broadcast
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ignitis and EVS is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ignitis Grupe AB 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 Ignitis Grupe 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 Ignitis Grupe AB 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 Ignitis Grupe i.e., Ignitis Grupe and EVS Broadcast go up and down completely randomly.
Pair Corralation between Ignitis Grupe and EVS Broadcast
Assuming the 90 days trading horizon Ignitis Grupe AB is expected to generate 7.69 times more return on investment than EVS Broadcast. However, Ignitis Grupe is 7.69 times more volatile than EVS Broadcast Equipment. It trades about 0.06 of its potential returns per unit of risk. EVS Broadcast Equipment is currently generating about 0.05 per unit of risk. If you would invest 1,634 in Ignitis Grupe AB on September 4, 2024 and sell it today you would earn a total of 236.00 from holding Ignitis Grupe AB or generate 14.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 84.43% |
| Values | Daily Returns |
Ignitis Grupe AB vs. EVS Broadcast Equipment
Performance |
| Timeline |
| Ignitis Grupe AB |
| EVS Broadcast Equipment |
Ignitis Grupe and EVS Broadcast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ignitis Grupe and EVS Broadcast
The main advantage of trading using opposite Ignitis Grupe and EVS Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ignitis Grupe 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.| Ignitis Grupe vs. EVS Broadcast Equipment | Ignitis Grupe vs. Gaztransport et Technigaz | Ignitis Grupe vs. Molson Coors Beverage | Ignitis Grupe vs. Summit Materials Cl |
| EVS Broadcast vs. Samsung Electronics Co | EVS Broadcast vs. Samsung Electronics Co | EVS Broadcast vs. Hyundai Motor | EVS Broadcast vs. Toyota Motor 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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