Correlation Between Evercore Partners and Stonex

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

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

Diversification Opportunities for Evercore Partners and Stonex

0.95

Correlation Coefficient

Evercore Partners  Stonex

Almost no diversification

The 3 months correlation between Evercore and Stonex is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Evercore Partners and Stonex Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stonex Group 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 Stonex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stonex Group has no effect on the direction of Evercore Partners i.e., Evercore Partners and Stonex go up and down completely randomly.

Pair Corralation between Evercore Partners and Stonex

Considering the 90-day investment horizon Evercore Partners is expected to generate 1.55 times more return on investment than Stonex. However, Evercore Partners is 1.55 times more volatile than Stonex Group. It trades about 0.17 of its potential returns per unit of risk. Stonex Group is currently generating about 0.25 per unit of risk. If you would invest  23,691  in Evercore Partners on September 2, 2024 and sell it today you would earn a total of  7,099  from holding Evercore Partners or generate 29.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Evercore Partners  vs.  Stonex Group

Evercore Partners

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evercore Partners are ranked lower than 13 (%) 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.

Stonex Group

Risk-Adjusted Performance

19 of 100

Solid

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

Pair Trading with Evercore Partners and Stonex

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

The idea behind Evercore Partners and Stonex 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.