Correlation Between EGPT and FlexShares International

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

By analyzing existing cross correlation between EGPT and FlexShares International Quality, you can compare the effects of market volatilities on EGPT and FlexShares International 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 EGPT with a short position of FlexShares International. Check out your portfolio center. Please also check ongoing floating volatility patterns of EGPT and FlexShares International.

Diversification Opportunities for EGPT and FlexShares International

0.0

Correlation Coefficient

EGPT  FlexShares International

Pay attention - limited upside

The 3 months correlation between EGPT and FlexShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EGPT and FlexShares International Quali in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares International and EGPT 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 EGPT are associated (or correlated) with FlexShares International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares International has no effect on the direction of EGPT i.e., EGPT and FlexShares International go up and down completely randomly.

Pair Corralation between EGPT and FlexShares International

If you would invest  2,753  in FlexShares International Quality on December 29, 2024 and sell it today you would earn a total of  174.00  from holding FlexShares International Quality or generate 6.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

EGPT  vs.  FlexShares International Quali

EGPT

Risk-Adjusted Performance

Very Weak

Over the last 90 days EGPT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, EGPT is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

FlexShares International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FlexShares International Quality are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, FlexShares International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with EGPT and FlexShares International

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

The idea behind EGPT and FlexShares International Quality 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.