Correlation Between Evercore Partners and Netcapital

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

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

Diversification Opportunities for Evercore Partners and Netcapital

-0.22

Correlation Coefficient

Evercore Partners  Netcapital

Very good diversification

The 3 months correlation between Evercore and Netcapital is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Evercore Partners and Netcapital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netcapital 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 Netcapital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netcapital has no effect on the direction of Evercore Partners i.e., Evercore Partners and Netcapital go up and down completely randomly.

Pair Corralation between Evercore Partners and Netcapital

Considering the 90-day investment horizon Evercore Partners is expected to under-perform the Netcapital. But the stock apears to be less risky and, when comparing its historical volatility, Evercore Partners is 3.95 times less risky than Netcapital. The stock trades about -0.12 of its potential returns per unit of risk. The Netcapital is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  166.00  in Netcapital on September 9, 2024 and sell it today you would earn a total of  48.00  from holding Netcapital or generate 28.92% 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.  Netcapital

Evercore Partners

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evercore Partners are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Evercore Partners reported solid returns over the last few months and may actually be approaching a breakup point.

Netcapital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Netcapital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Netcapital is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Evercore Partners and Netcapital

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

The idea behind Evercore Partners and Netcapital 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.