Correlation Between Eline Entertainment and Evertz Technologies

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

By analyzing existing cross correlation between Eline Entertainment Group and Evertz Technologies Limited, you can compare the effects of market volatilities on Eline Entertainment and Evertz Technologies 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 Eline Entertainment with a short position of Evertz Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eline Entertainment and Evertz Technologies.

Diversification Opportunities for Eline Entertainment and Evertz Technologies

-0.11

Correlation Coefficient

Eline Entertainment  Evertz Technologies

Good diversification

The 3 months correlation between Eline and Evertz is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Eline Entertainment Group and Evertz Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evertz Technologies and Eline Entertainment 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 Eline Entertainment Group are associated (or correlated) with Evertz Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evertz Technologies has no effect on the direction of Eline Entertainment i.e., Eline Entertainment and Evertz Technologies go up and down completely randomly.

Pair Corralation between Eline Entertainment and Evertz Technologies

Given the investment horizon of 90 days Eline Entertainment Group is expected to generate 10.03 times more return on investment than Evertz Technologies. However, Eline Entertainment is 10.03 times more volatile than Evertz Technologies Limited. It trades about 0.14 of its potential returns per unit of risk. Evertz Technologies Limited is currently generating about -0.07 per unit of risk. If you would invest  0.02  in Eline Entertainment Group on December 25, 2024 and sell it today you would earn a total of  0.02  from holding Eline Entertainment Group or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Eline Entertainment Group  vs.  Evertz Technologies Limited

Eline Entertainment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eline Entertainment Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical and fundamental indicators, Eline Entertainment demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Evertz Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evertz Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Eline Entertainment and Evertz Technologies

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

The idea behind Eline Entertainment Group and Evertz Technologies Limited 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.