Correlation Between EVS Broadcast and Aberdeen Diversified

Can any of the company-specific risk be diversified away by investing in both EVS Broadcast and Aberdeen Diversified 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 EVS Broadcast and Aberdeen Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EVS Broadcast Equipment and Aberdeen Diversified Income, you can compare the effects of market volatilities on EVS Broadcast and Aberdeen Diversified 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 EVS Broadcast with a short position of Aberdeen Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVS Broadcast and Aberdeen Diversified.

Diversification Opportunities for EVS Broadcast and Aberdeen Diversified

0.78

Correlation Coefficient

EVS Broadcast  Aberdeen Diversified

Poor diversification

The 3 months correlation between EVS and Aberdeen is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and Aberdeen Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Diversified and EVS Broadcast 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 EVS Broadcast Equipment are associated (or correlated) with Aberdeen Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Diversified has no effect on the direction of EVS Broadcast i.e., EVS Broadcast and Aberdeen Diversified go up and down completely randomly.

Pair Corralation between EVS Broadcast and Aberdeen Diversified

Assuming the 90 days trading horizon EVS Broadcast Equipment is expected to generate 1.24 times more return on investment than Aberdeen Diversified. However, EVS Broadcast is 1.24 times more volatile than Aberdeen Diversified Income. It trades about 0.19 of its potential returns per unit of risk. Aberdeen Diversified Income is currently generating about 0.16 per unit of risk. If you would invest  3,100  in EVS Broadcast Equipment on December 30, 2024 and sell it today you would earn a total of  670.00  from holding EVS Broadcast Equipment or generate 21.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

EVS Broadcast Equipment  vs.  Aberdeen Diversified Income

EVS Broadcast Equipment

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EVS Broadcast Equipment are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, EVS Broadcast unveiled solid returns over the last few months and may actually be approaching a breakup point.

Aberdeen Diversified

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Diversified Income are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Aberdeen Diversified unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EVS Broadcast and Aberdeen Diversified

The main advantage of trading using opposite EVS Broadcast and Aberdeen Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVS Broadcast position performs unexpectedly, Aberdeen Diversified 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 Aberdeen Diversified will offset losses from the drop in Aberdeen Diversified's long position.

The idea behind EVS Broadcast Equipment and Aberdeen Diversified Income pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.