Correlation Between Evercore Partners and Interactive Brokers

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

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

Diversification Opportunities for Evercore Partners and Interactive Brokers

-0.31

Correlation Coefficient

Evercore Partners  Interactive Brokers

Very good diversification

The 3 months correlation between Evercore and Interactive is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Evercore Partners and Interactive Brokers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interactive Brokers and Evercore Partners 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 Evercore Partners are associated (or correlated) with Interactive Brokers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interactive Brokers has no effect on the direction of Evercore Partners i.e., Evercore Partners and Interactive Brokers go up and down completely randomly.

Pair Corralation between Evercore Partners and Interactive Brokers

Considering the 90-day investment horizon Evercore Partners is expected to under-perform the Interactive Brokers. But the stock apears to be less risky and, when comparing its historical volatility, Evercore Partners is 1.4 times less risky than Interactive Brokers. The stock trades about -0.2 of its potential returns per unit of risk. The Interactive Brokers Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  18,545  in Interactive Brokers Group on December 1, 2024 and sell it today you would earn a total of  1,895  from holding Interactive Brokers Group or generate 10.22% return on investment over 90 days.

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

Evercore Partners  vs.  Interactive Brokers Group

Evercore Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evercore Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Interactive Brokers

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Interactive Brokers Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain forward-looking signals, Interactive Brokers may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Evercore Partners and Interactive Brokers

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

The idea behind Evercore Partners and Interactive Brokers Group 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.