Correlation Between Run Long and Eva Airways

Can any of the company-specific risk be diversified away by investing in both Run Long and Eva Airways 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 Run Long and Eva Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Run Long Construction and Eva Airways Corp, you can compare the effects of market volatilities on Run Long and Eva Airways 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 Run Long with a short position of Eva Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Run Long and Eva Airways.

Diversification Opportunities for Run Long and Eva Airways

-0.87

Correlation Coefficient

Run Long  Eva Airways

Pay attention - limited upside

The 3 months correlation between Run and Eva is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Run Long Construction and Eva Airways Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eva Airways Corp and Run Long 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 Run Long Construction are associated (or correlated) with Eva Airways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eva Airways Corp has no effect on the direction of Run Long i.e., Run Long and Eva Airways go up and down completely randomly.

Pair Corralation between Run Long and Eva Airways

Assuming the 90 days trading horizon Run Long Construction is expected to under-perform the Eva Airways. In addition to that, Run Long is 1.78 times more volatile than Eva Airways Corp. It trades about -0.01 of its total potential returns per unit of risk. Eva Airways Corp is currently generating about 0.06 per unit of volatility. If you would invest  2,865  in Eva Airways Corp on October 4, 2024 and sell it today you would earn a total of  1,570  from holding Eva Airways Corp or generate 54.8% return on investment over 90 days.

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

Run Long Construction  vs.  Eva Airways Corp

Run Long Construction

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Run Long Construction has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Eva Airways Corp

Risk-Adjusted Performance

17 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eva Airways Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Eva Airways showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Run Long and Eva Airways

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

The idea behind Run Long Construction and Eva Airways Corp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.