Correlation Between EVS Broadcast and TOTAL ENERGY

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

Diversification Opportunities for EVS Broadcast and TOTAL ENERGY

0.55

Correlation Coefficient

EVS Broadcast  TOTAL ENERGY

Very weak diversification

The 3 months correlation between EVS and TOTAL is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and TOTAL ENERGY SERVS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOTAL ENERGY SERVS 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 TOTAL ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOTAL ENERGY SERVS has no effect on the direction of EVS Broadcast i.e., EVS Broadcast and TOTAL ENERGY go up and down completely randomly.

Pair Corralation between EVS Broadcast and TOTAL ENERGY

Assuming the 90 days trading horizon EVS Broadcast Equipment is expected to under-perform the TOTAL ENERGY. But the stock apears to be less risky and, when comparing its historical volatility, EVS Broadcast Equipment is 1.91 times less risky than TOTAL ENERGY. The stock trades about -0.2 of its potential returns per unit of risk. The TOTAL ENERGY SERVS is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  736.00  in TOTAL ENERGY SERVS on October 23, 2024 and sell it today you would earn a total of  36.00  from holding TOTAL ENERGY SERVS or generate 4.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.12%
Values	Daily Returns

EVS Broadcast Equipment  vs.  TOTAL ENERGY SERVS

EVS Broadcast Equipment

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in EVS Broadcast Equipment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, EVS Broadcast is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

TOTAL ENERGY SERVS

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TOTAL ENERGY SERVS are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TOTAL ENERGY reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EVS Broadcast and TOTAL ENERGY

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

The idea behind EVS Broadcast Equipment and TOTAL ENERGY SERVS 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.