Correlation Between Everest and Silvercrest Asset

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

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

Diversification Opportunities for Everest and Silvercrest Asset

-0.29

Correlation Coefficient

Everest  Silvercrest Asset

Very good diversification

The 3 months correlation between Everest and Silvercrest is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Everest Group and Silvercrest Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercrest Asset and Everest 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 Everest Group are associated (or correlated) with Silvercrest Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercrest Asset has no effect on the direction of Everest i.e., Everest and Silvercrest Asset go up and down completely randomly.

Pair Corralation between Everest and Silvercrest Asset

Allowing for the 90-day total investment horizon Everest Group is expected to generate 0.94 times more return on investment than Silvercrest Asset. However, Everest Group is 1.06 times less risky than Silvercrest Asset. It trades about -0.01 of its potential returns per unit of risk. Silvercrest Asset Management is currently generating about -0.11 per unit of risk. If you would invest  35,735  in Everest Group on December 22, 2024 and sell it today you would lose (493.00) from holding Everest Group or give up 1.38% of portfolio value over 90 days.

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

Everest Group  vs.  Silvercrest Asset Management

Everest Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Everest Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Everest is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Silvercrest Asset

Risk-Adjusted Performance

Very Weak

Over the last 90 days Silvercrest Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's primary 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 Everest and Silvercrest Asset

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

The idea behind Everest Group and Silvercrest Asset Management 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.