Correlation Between EVS Broadcast and National Health

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

Diversification Opportunities for EVS Broadcast and National Health

0.65

Correlation Coefficient

EVS Broadcast  National Health

Poor diversification

The 3 months correlation between EVS and National is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and National Health Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Investors 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 National Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Health Investors has no effect on the direction of EVS Broadcast i.e., EVS Broadcast and National Health go up and down completely randomly.

Pair Corralation between EVS Broadcast and National Health

Assuming the 90 days trading horizon EVS Broadcast Equipment is expected to generate 0.96 times more return on investment than National Health. However, EVS Broadcast Equipment is 1.04 times less risky than National Health. It trades about 0.2 of its potential returns per unit of risk. National Health Investors is currently generating about 0.05 per unit of risk. If you would invest  3,080  in EVS Broadcast Equipment on December 30, 2024 and sell it today you would earn a total of  675.00  from holding EVS Broadcast Equipment or generate 21.92% return on investment over 90 days.

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

EVS Broadcast Equipment  vs.  National Health Investors

EVS Broadcast Equipment

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EVS Broadcast Equipment are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, EVS Broadcast unveiled solid returns over the last few months and may actually be approaching a breakup point.

National Health Investors

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in National Health Investors are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, National Health is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with EVS Broadcast and National Health

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

The idea behind EVS Broadcast Equipment and National Health Investors 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.