Correlation Between Eve Holding and StandardAero,

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

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

Diversification Opportunities for Eve Holding and StandardAero,

-0.7

Correlation Coefficient

Eve Holding  StandardAero,

Excellent diversification

The 3 months correlation between Eve and StandardAero, is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Eve Holding and StandardAero, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StandardAero, and Eve 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 Eve Holding are associated (or correlated) with StandardAero,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StandardAero, has no effect on the direction of Eve Holding i.e., Eve Holding and StandardAero, go up and down completely randomly.

Pair Corralation between Eve Holding and StandardAero,

Given the investment horizon of 90 days Eve Holding is expected to generate 1.85 times more return on investment than StandardAero,. However, Eve Holding is 1.85 times more volatile than StandardAero,. It trades about 0.35 of its potential returns per unit of risk. StandardAero, is currently generating about -0.32 per unit of risk. If you would invest  460.00  in Eve Holding on October 9, 2024 and sell it today you would earn a total of  129.00  from holding Eve Holding or generate 28.04% return on investment over 90 days.

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

Eve Holding  vs.  StandardAero,

Eve Holding

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eve Holding are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, Eve Holding showed solid returns over the last few months and may actually be approaching a breakup point.

StandardAero,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days StandardAero, 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 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 Eve Holding and StandardAero,

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

The idea behind Eve Holding and StandardAero, 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.