Correlation Between EVS Broadcast and HOCHSCHILD MINING

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

Diversification Opportunities for EVS Broadcast and HOCHSCHILD MINING

0.13

Correlation Coefficient

EVS Broadcast  HOCHSCHILD MINING

Average diversification

The 3 months correlation between EVS and HOCHSCHILD is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and HOCHSCHILD MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOCHSCHILD MINING 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 HOCHSCHILD MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOCHSCHILD MINING has no effect on the direction of EVS Broadcast i.e., EVS Broadcast and HOCHSCHILD MINING go up and down completely randomly.

Pair Corralation between EVS Broadcast and HOCHSCHILD MINING

Assuming the 90 days trading horizon EVS Broadcast Equipment is expected to generate 0.42 times more return on investment than HOCHSCHILD MINING. However, EVS Broadcast Equipment is 2.39 times less risky than HOCHSCHILD MINING. It trades about 0.23 of its potential returns per unit of risk. HOCHSCHILD MINING is currently generating about 0.04 per unit of risk. If you would invest  2,925  in EVS Broadcast Equipment on September 27, 2024 and sell it today you would earn a total of  170.00  from holding EVS Broadcast Equipment or generate 5.81% return on investment over 90 days.

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

EVS Broadcast Equipment  vs.  HOCHSCHILD MINING

EVS Broadcast Equipment

Risk-Adjusted Performance

11 of 100

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.

HOCHSCHILD MINING

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HOCHSCHILD MINING are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, HOCHSCHILD MINING may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with EVS Broadcast and HOCHSCHILD MINING

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

The idea behind EVS Broadcast Equipment and HOCHSCHILD MINING 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.