Correlation Between Ease2pay and IShares SP

Can any of the company-specific risk be diversified away by investing in both Ease2pay and IShares SP 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 Ease2pay and IShares SP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ease2pay NV and iShares SP 500, you can compare the effects of market volatilities on Ease2pay and IShares SP 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 Ease2pay with a short position of IShares SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ease2pay and IShares SP.

Diversification Opportunities for Ease2pay and IShares SP

0.89

Correlation Coefficient

Ease2pay  IShares SP

Very poor diversification

The 3 months correlation between Ease2pay and IShares is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ease2pay NV and iShares SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SP 500 and Ease2pay 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 Ease2pay NV are associated (or correlated) with IShares SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SP 500 has no effect on the direction of Ease2pay i.e., Ease2pay and IShares SP go up and down completely randomly.

Pair Corralation between Ease2pay and IShares SP

Assuming the 90 days trading horizon Ease2pay NV is expected to under-perform the IShares SP. In addition to that, Ease2pay is 4.76 times more volatile than iShares SP 500. It trades about -0.08 of its total potential returns per unit of risk. iShares SP 500 is currently generating about -0.25 per unit of volatility. If you would invest  735.00  in iShares SP 500 on September 17, 2024 and sell it today you would lose (76.00) from holding iShares SP 500 or give up 10.34% of portfolio value over 90 days.

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

Ease2pay NV  vs.  iShares SP 500

Ease2pay NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ease2pay NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

iShares SP 500

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares SP 500 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with Ease2pay and IShares SP

The main advantage of trading using opposite Ease2pay and IShares SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ease2pay position performs unexpectedly, IShares SP 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 IShares SP will offset losses from the drop in IShares SP's long position.

The idea behind Ease2pay NV and iShares SP 500 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.