Correlation Between EMvision Medical and Ebr Systems

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

By analyzing existing cross correlation between EMvision Medical Devices and Ebr Systems CDR, you can compare the effects of market volatilities on EMvision Medical and Ebr Systems 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 EMvision Medical with a short position of Ebr Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMvision Medical and Ebr Systems.

Diversification Opportunities for EMvision Medical and Ebr Systems

0.0

Correlation Coefficient

EMvision Medical  Ebr Systems

Pay attention - limited upside

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

Pair Corralation between EMvision Medical and Ebr Systems

Assuming the 90 days trading horizon EMvision Medical is expected to generate 2.82 times less return on investment than Ebr Systems. But when comparing it to its historical volatility, EMvision Medical Devices is 1.08 times less risky than Ebr Systems. It trades about 0.02 of its potential returns per unit of risk. Ebr Systems CDR is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  57.00  in Ebr Systems CDR on October 10, 2024 and sell it today you would earn a total of  82.00  from holding Ebr Systems CDR or generate 143.86% return on investment over 90 days.

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

EMvision Medical Devices  vs.  Ebr Systems CDR

EMvision Medical Devices

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ebr Systems CDR

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ebr Systems CDR are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ebr Systems unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EMvision Medical and Ebr Systems

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

The idea behind EMvision Medical Devices and Ebr Systems CDR 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.