Correlation Between EVS Broadcast and COMINTL BANK

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Can any of the company-specific risk be diversified away by investing in both EVS Broadcast and COMINTL BANK 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 COMINTL BANK 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 COMINTL BANK ADR1, you can compare the effects of market volatilities on EVS Broadcast and COMINTL BANK 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 COMINTL BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVS Broadcast and COMINTL BANK.

Diversification Opportunities for EVS Broadcast and COMINTL BANK

0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between EVS and COMINTL is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and COMINTL BANK ADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMINTL BANK ADR1 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 COMINTL BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMINTL BANK ADR1 has no effect on the direction of EVS Broadcast i.e., EVS Broadcast and COMINTL BANK go up and down completely randomly.

Pair Corralation between EVS Broadcast and COMINTL BANK

Assuming the 90 days trading horizon EVS Broadcast Equipment is expected to generate 0.64 times more return on investment than COMINTL BANK. However, EVS Broadcast Equipment is 1.56 times less risky than COMINTL BANK. It trades about 0.06 of its potential returns per unit of risk. COMINTL BANK ADR1 is currently generating about 0.03 per unit of risk. If you would invest  2,032  in EVS Broadcast Equipment on October 2, 2024 and sell it today you would earn a total of  1,048  from holding EVS Broadcast Equipment or generate 51.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

EVS Broadcast Equipment  vs.  COMINTL BANK ADR1

 Performance 
       Timeline  
EVS Broadcast Equipment 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in EVS Broadcast Equipment are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, EVS Broadcast may actually be approaching a critical reversion point that can send shares even higher in January 2025.
COMINTL BANK ADR1 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days COMINTL BANK ADR1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, COMINTL BANK is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

EVS Broadcast and COMINTL BANK Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with EVS Broadcast and COMINTL BANK

The main advantage of trading using opposite EVS Broadcast and COMINTL BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVS Broadcast position performs unexpectedly, COMINTL BANK 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 COMINTL BANK will offset losses from the drop in COMINTL BANK's long position.
The idea behind EVS Broadcast Equipment and COMINTL BANK ADR1 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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