Correlation Between Evolva Holding and Ypsomed Holding

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

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

Diversification Opportunities for Evolva Holding and Ypsomed Holding

-0.39

Correlation Coefficient

Evolva Holding  Ypsomed Holding

Very good diversification

The 3 months correlation between Evolva and Ypsomed is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Evolva Holding SA and Ypsomed Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ypsomed Holding AG and Evolva Holding 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 Evolva Holding SA are associated (or correlated) with Ypsomed Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ypsomed Holding AG has no effect on the direction of Evolva Holding i.e., Evolva Holding and Ypsomed Holding go up and down completely randomly.

Pair Corralation between Evolva Holding and Ypsomed Holding

Assuming the 90 days trading horizon Evolva Holding SA is expected to generate 3.7 times more return on investment than Ypsomed Holding. However, Evolva Holding is 3.7 times more volatile than Ypsomed Holding AG. It trades about 0.25 of its potential returns per unit of risk. Ypsomed Holding AG is currently generating about 0.2 per unit of risk. If you would invest  85.00  in Evolva Holding SA on October 26, 2024 and sell it today you would earn a total of  28.00  from holding Evolva Holding SA or generate 32.94% return on investment over 90 days.

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

Evolva Holding SA  vs.  Ypsomed Holding AG

Evolva Holding SA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Evolva Holding SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Evolva Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Ypsomed Holding AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ypsomed Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Evolva Holding and Ypsomed Holding

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

The idea behind Evolva Holding SA and Ypsomed Holding AG 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.