Correlation Between Ethan Allen and Civeo Corp

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

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

Diversification Opportunities for Ethan Allen and Civeo Corp

0.15

Correlation Coefficient

Ethan Allen  Civeo Corp

Average diversification

The 3 months correlation between Ethan and Civeo is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ethan Allen Interiors and Civeo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Civeo Corp and Ethan Allen 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 Ethan Allen Interiors are associated (or correlated) with Civeo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Civeo Corp has no effect on the direction of Ethan Allen i.e., Ethan Allen and Civeo Corp go up and down completely randomly.

Pair Corralation between Ethan Allen and Civeo Corp

Considering the 90-day investment horizon Ethan Allen is expected to generate 1.65 times less return on investment than Civeo Corp. In addition to that, Ethan Allen is 1.05 times more volatile than Civeo Corp. It trades about 0.02 of its total potential returns per unit of risk. Civeo Corp is currently generating about 0.04 per unit of volatility. If you would invest  1,828  in Civeo Corp on October 22, 2024 and sell it today you would earn a total of  544.00  from holding Civeo Corp or generate 29.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.74%
Values	Daily Returns

Ethan Allen Interiors  vs.  Civeo Corp

Ethan Allen Interiors

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ethan Allen Interiors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Ethan Allen is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Civeo Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Civeo Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental 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 Ethan Allen and Civeo Corp

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

The idea behind Ethan Allen Interiors and Civeo Corp 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 Stocks Directory module to find actively traded stocks across global markets.