Correlation Between EvoAir Holdings and Shoprite Holdings

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

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

Diversification Opportunities for EvoAir Holdings and Shoprite Holdings

0.0

Correlation Coefficient

EvoAir Holdings  Shoprite Holdings

Pay attention - limited upside

The 3 months correlation between EvoAir and Shoprite is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EvoAir Holdings and Shoprite Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoprite Holdings and EvoAir Holdings 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 EvoAir Holdings are associated (or correlated) with Shoprite Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoprite Holdings has no effect on the direction of EvoAir Holdings i.e., EvoAir Holdings and Shoprite Holdings go up and down completely randomly.

Pair Corralation between EvoAir Holdings and Shoprite Holdings

If you would invest  1,370  in Shoprite Holdings Limited on September 23, 2024 and sell it today you would earn a total of  263.00  from holding Shoprite Holdings Limited or generate 19.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	59.84%
Values	Daily Returns

EvoAir Holdings  vs.  Shoprite Holdings Limited

EvoAir Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Shoprite Holdings

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Shoprite Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak technical and fundamental indicators, Shoprite Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with EvoAir Holdings and Shoprite Holdings

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

The idea behind EvoAir Holdings and Shoprite Holdings Limited 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..