Correlation Between EVS Broadcast and Econocom Group

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

By analyzing existing cross correlation between EVS Broadcast Equipment and Econocom Group SANV, you can compare the effects of market volatilities on EVS Broadcast and Econocom Group 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 EVS Broadcast with a short position of Econocom Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVS Broadcast and Econocom Group.

Diversification Opportunities for EVS Broadcast and Econocom Group

-0.43

Correlation Coefficient

EVS Broadcast  Econocom Group

Very good diversification

The 3 months correlation between EVS and Econocom is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and Econocom Group SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Econocom Group SANV and EVS Broadcast 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 EVS Broadcast Equipment are associated (or correlated) with Econocom Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Econocom Group SANV has no effect on the direction of EVS Broadcast i.e., EVS Broadcast and Econocom Group go up and down completely randomly.

Pair Corralation between EVS Broadcast and Econocom Group

Assuming the 90 days trading horizon EVS Broadcast Equipment is expected to generate 1.03 times more return on investment than Econocom Group. However, EVS Broadcast is 1.03 times more volatile than Econocom Group SANV. It trades about 0.27 of its potential returns per unit of risk. Econocom Group SANV is currently generating about 0.09 per unit of risk. If you would invest  3,140  in EVS Broadcast Equipment on December 4, 2024 and sell it today you would earn a total of  445.00  from holding EVS Broadcast Equipment or generate 14.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

EVS Broadcast Equipment  vs.  Econocom Group SANV

EVS Broadcast Equipment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in EVS Broadcast Equipment are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, EVS Broadcast reported solid returns over the last few months and may actually be approaching a breakup point.

Econocom Group SANV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Econocom Group SANV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with EVS Broadcast and Econocom Group

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

The idea behind EVS Broadcast Equipment and Econocom Group SANV 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.