Correlation Between Lowes Companies and EVS Broadcast
Can any of the company-specific risk be diversified away by investing in both Lowes Companies 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 Lowes Companies and EVS Broadcast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowes Companies and EVS Broadcast Equipment, you can compare the effects of market volatilities on Lowes Companies 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 Lowes Companies with a short position of EVS Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowes Companies and EVS Broadcast.
Diversification Opportunities for Lowes Companies and EVS Broadcast
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lowes and EVS is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Lowes Companies 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 Lowes Companies 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 Lowes Companies 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 Lowes Companies i.e., Lowes Companies and EVS Broadcast go up and down completely randomly.
Pair Corralation between Lowes Companies and EVS Broadcast
Assuming the 90 days horizon Lowes Companies is expected to generate 1.12 times less return on investment than EVS Broadcast. In addition to that, Lowes Companies is 1.01 times more volatile than EVS Broadcast Equipment. It trades about 0.05 of its total potential returns per unit of risk. EVS Broadcast Equipment is currently generating about 0.06 per unit of volatility. If you would invest 1,938 in EVS Broadcast Equipment on September 3, 2024 and sell it today you would earn a total of 877.00 from holding EVS Broadcast Equipment or generate 45.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lowes Companies vs. EVS Broadcast Equipment
Performance |
| Timeline |
| Lowes Companies |
| EVS Broadcast Equipment |
Lowes Companies and EVS Broadcast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowes Companies and EVS Broadcast
The main advantage of trading using opposite Lowes Companies and EVS Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowes Companies 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.| Lowes Companies vs. BURLINGTON STORES | Lowes Companies vs. Chongqing Machinery Electric | Lowes Companies vs. Retail Estates NV | Lowes Companies vs. MARKET VECTR RETAIL |
| EVS Broadcast vs. Boyd Gaming | EVS Broadcast vs. GameStop Corp | EVS Broadcast vs. Nufarm Limited | EVS Broadcast vs. HYDROFARM HLD GRP |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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