Correlation Between APG Securities and EVN Finance

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

By analyzing existing cross correlation between APG Securities Joint and EVN Finance JSC, you can compare the effects of market volatilities on APG Securities and EVN Finance 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 APG Securities with a short position of EVN Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of APG Securities and EVN Finance.

Diversification Opportunities for APG Securities and EVN Finance

0.84

Correlation Coefficient

APG Securities  EVN Finance

Very poor diversification

The 3 months correlation between APG and EVN is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding APG Securities Joint and EVN Finance JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVN Finance JSC and APG Securities 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 APG Securities Joint are associated (or correlated) with EVN Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVN Finance JSC has no effect on the direction of APG Securities i.e., APG Securities and EVN Finance go up and down completely randomly.

Pair Corralation between APG Securities and EVN Finance

Assuming the 90 days trading horizon APG Securities Joint is expected to under-perform the EVN Finance. In addition to that, APG Securities is 1.1 times more volatile than EVN Finance JSC. It trades about -0.17 of its total potential returns per unit of risk. EVN Finance JSC is currently generating about -0.07 per unit of volatility. If you would invest  1,259,259  in EVN Finance JSC on October 9, 2024 and sell it today you would lose (379,259) from holding EVN Finance JSC or give up 30.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.41%
Values	Daily Returns

APG Securities Joint  vs.  EVN Finance JSC

APG Securities Joint

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days APG Securities Joint has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

EVN Finance JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EVN Finance JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with APG Securities and EVN Finance

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

The idea behind APG Securities Joint and EVN Finance JSC 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.