Correlation Between Eva Airways and Macroblock

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

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

Diversification Opportunities for Eva Airways and Macroblock

-0.93

Correlation Coefficient

Eva Airways  Macroblock

Pay attention - limited upside

The 3 months correlation between Eva and Macroblock is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Eva Airways Corp and Macroblock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macroblock and Eva Airways 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 Eva Airways Corp are associated (or correlated) with Macroblock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macroblock has no effect on the direction of Eva Airways i.e., Eva Airways and Macroblock go up and down completely randomly.

Pair Corralation between Eva Airways and Macroblock

Assuming the 90 days trading horizon Eva Airways Corp is expected to generate 1.24 times more return on investment than Macroblock. However, Eva Airways is 1.24 times more volatile than Macroblock. It trades about 0.23 of its potential returns per unit of risk. Macroblock is currently generating about -0.04 per unit of risk. If you would invest  4,170  in Eva Airways Corp on September 28, 2024 and sell it today you would earn a total of  455.00  from holding Eva Airways Corp or generate 10.91% return on investment over 90 days.

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

Eva Airways Corp  vs.  Macroblock

Eva Airways Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eva Airways Corp are ranked lower than 15 (%) 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.

Macroblock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Macroblock 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 January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Eva Airways and Macroblock

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

The idea behind Eva Airways Corp and Macroblock 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.