Correlation Between EVS Broadcast and CAP LEASE

Can any of the company-specific risk be diversified away by investing in both EVS Broadcast and CAP LEASE 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 CAP LEASE 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 CAP LEASE AVIATION, you can compare the effects of market volatilities on EVS Broadcast and CAP LEASE 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 CAP LEASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVS Broadcast and CAP LEASE.

Diversification Opportunities for EVS Broadcast and CAP LEASE

-0.2

Correlation Coefficient

EVS Broadcast  CAP LEASE

Good diversification

The 3 months correlation between EVS and CAP is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and CAP LEASE AVIATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAP LEASE AVIATION 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 CAP LEASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAP LEASE AVIATION has no effect on the direction of EVS Broadcast i.e., EVS Broadcast and CAP LEASE go up and down completely randomly.

Pair Corralation between EVS Broadcast and CAP LEASE

Assuming the 90 days trading horizon EVS Broadcast Equipment is expected to generate 0.42 times more return on investment than CAP LEASE. However, EVS Broadcast Equipment is 2.39 times less risky than CAP LEASE. It trades about 0.24 of its potential returns per unit of risk. CAP LEASE AVIATION is currently generating about -0.04 per unit of risk. If you would invest  3,080  in EVS Broadcast Equipment on December 21, 2024 and sell it today you would earn a total of  790.00  from holding EVS Broadcast Equipment or generate 25.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

EVS Broadcast Equipment  vs.  CAP LEASE AVIATION

EVS Broadcast Equipment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in EVS Broadcast Equipment are ranked lower than 18 (%) 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.

CAP LEASE AVIATION

Risk-Adjusted Performance

Very Weak

Over the last 90 days CAP LEASE AVIATION has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with EVS Broadcast and CAP LEASE

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

The idea behind EVS Broadcast Equipment and CAP LEASE AVIATION 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.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.