Correlation Between Everus Construction and NV5 Global

Can any of the company-specific risk be diversified away by investing in both Everus Construction and NV5 Global 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 Everus Construction and NV5 Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Everus Construction Group and NV5 Global, you can compare the effects of market volatilities on Everus Construction and NV5 Global 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 Everus Construction with a short position of NV5 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everus Construction and NV5 Global.

Diversification Opportunities for Everus Construction and NV5 Global

-0.53

Correlation Coefficient

Everus Construction  NV5 Global

Excellent diversification

The 3 months correlation between Everus and NV5 is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Everus Construction Group and NV5 Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV5 Global and Everus Construction 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 Everus Construction Group are associated (or correlated) with NV5 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV5 Global has no effect on the direction of Everus Construction i.e., Everus Construction and NV5 Global go up and down completely randomly.

Pair Corralation between Everus Construction and NV5 Global

Considering the 90-day investment horizon Everus Construction Group is expected to generate 1.99 times more return on investment than NV5 Global. However, Everus Construction is 1.99 times more volatile than NV5 Global. It trades about 0.19 of its potential returns per unit of risk. NV5 Global is currently generating about -0.06 per unit of risk. If you would invest  4,900  in Everus Construction Group on October 4, 2024 and sell it today you would earn a total of  1,675  from holding Everus Construction Group or generate 34.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	9.29%
Values	Daily Returns

Everus Construction Group  vs.  NV5 Global

Everus Construction

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Everus Construction Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly sluggish fundamental indicators, Everus Construction reported solid returns over the last few months and may actually be approaching a breakup point.

NV5 Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NV5 Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Everus Construction and NV5 Global

The main advantage of trading using opposite Everus Construction and NV5 Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everus Construction position performs unexpectedly, NV5 Global 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 NV5 Global will offset losses from the drop in NV5 Global's long position.

The idea behind Everus Construction Group and NV5 Global 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.