Correlation Between EOSDAC and Aevo

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

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

Diversification Opportunities for EOSDAC and Aevo

0.76

Correlation Coefficient

EOSDAC  Aevo

Poor diversification

The 3 months correlation between EOSDAC and Aevo is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding EOSDAC and Aevo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aevo and EOSDAC 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 EOSDAC are associated (or correlated) with Aevo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aevo has no effect on the direction of EOSDAC i.e., EOSDAC and Aevo go up and down completely randomly.

Pair Corralation between EOSDAC and Aevo

Assuming the 90 days trading horizon EOSDAC is expected to generate 0.97 times more return on investment than Aevo. However, EOSDAC is 1.03 times less risky than Aevo. It trades about -0.03 of its potential returns per unit of risk. Aevo is currently generating about -0.18 per unit of risk. If you would invest  0.03  in EOSDAC on December 24, 2024 and sell it today you would lose (0.01) from holding EOSDAC or give up 28.65% of portfolio value over 90 days.

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

EOSDAC  vs.  Aevo

EOSDAC

Risk-Adjusted Performance

Very Weak

Over the last 90 days EOSDAC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Crypto's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for EOSDAC investors.

Aevo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aevo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Aevo shareholders.

Pair Trading with EOSDAC and Aevo

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

The idea behind EOSDAC and Aevo 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.