Correlation Between Evertz Technologies and Exxon

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

By analyzing existing cross correlation between Evertz Technologies Limited and EXXON MOBIL CDR, you can compare the effects of market volatilities on Evertz Technologies and Exxon 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 Evertz Technologies with a short position of Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evertz Technologies and Exxon.

Diversification Opportunities for Evertz Technologies and Exxon

-0.56

Correlation Coefficient

Evertz Technologies  Exxon

Excellent diversification

The 3 months correlation between Evertz and Exxon is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Evertz Technologies Limited and EXXON MOBIL CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXXON MOBIL CDR and Evertz Technologies 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 Evertz Technologies Limited are associated (or correlated) with Exxon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXXON MOBIL CDR has no effect on the direction of Evertz Technologies i.e., Evertz Technologies and Exxon go up and down completely randomly.

Pair Corralation between Evertz Technologies and Exxon

Assuming the 90 days horizon Evertz Technologies Limited is expected to generate 1.1 times more return on investment than Exxon. However, Evertz Technologies is 1.1 times more volatile than EXXON MOBIL CDR. It trades about 0.15 of its potential returns per unit of risk. EXXON MOBIL CDR is currently generating about -0.22 per unit of risk. If you would invest  1,149  in Evertz Technologies Limited on October 6, 2024 and sell it today you would earn a total of  131.00  from holding Evertz Technologies Limited or generate 11.4% return on investment over 90 days.

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

Evertz Technologies Limited  vs.  EXXON MOBIL CDR

Evertz Technologies

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evertz Technologies Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Evertz Technologies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

EXXON MOBIL CDR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EXXON MOBIL CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Evertz Technologies and Exxon

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

The idea behind Evertz Technologies Limited and EXXON MOBIL 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.

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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.