Correlation Between Embrace Change and Evercore Partners

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

By analyzing existing cross correlation between Embrace Change Acquisition and Evercore Partners, you can compare the effects of market volatilities on Embrace Change and Evercore Partners 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 Embrace Change with a short position of Evercore Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embrace Change and Evercore Partners.

Diversification Opportunities for Embrace Change and Evercore Partners

-0.31

Correlation Coefficient

Embrace Change  Evercore Partners

Very good diversification

The 3 months correlation between Embrace and Evercore is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Embrace Change Acquisition and Evercore Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evercore Partners and Embrace Change 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 Embrace Change Acquisition are associated (or correlated) with Evercore Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evercore Partners has no effect on the direction of Embrace Change i.e., Embrace Change and Evercore Partners go up and down completely randomly.

Pair Corralation between Embrace Change and Evercore Partners

Assuming the 90 days horizon Embrace Change Acquisition is expected to generate 100.19 times more return on investment than Evercore Partners. However, Embrace Change is 100.19 times more volatile than Evercore Partners. It trades about 0.24 of its potential returns per unit of risk. Evercore Partners is currently generating about 0.17 per unit of risk. If you would invest  14.00  in Embrace Change Acquisition on August 31, 2024 and sell it today you would lose (2.00) from holding Embrace Change Acquisition or give up 14.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	22.22%
Values	Daily Returns

Embrace Change Acquisition  vs.  Evercore Partners

Embrace Change Acqui

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Embrace Change Acquisition are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Embrace Change reported solid returns over the last few months and may actually be approaching a breakup point.

Evercore Partners

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evercore Partners are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Evercore Partners reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Embrace Change and Evercore Partners

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

The idea behind Embrace Change Acquisition and Evercore Partners 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 CEOs Directory module to screen CEOs from public companies around the world.