Correlation Between EVS Broadcast and Sipef NV

Can any of the company-specific risk be diversified away by investing in both EVS Broadcast and Sipef NV 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 Sipef NV 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 Sipef NV, you can compare the effects of market volatilities on EVS Broadcast and Sipef NV 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 Sipef NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVS Broadcast and Sipef NV.

Diversification Opportunities for EVS Broadcast and Sipef NV

0.94

Correlation Coefficient

EVS Broadcast  Sipef NV

Almost no diversification

The 3 months correlation between EVS and Sipef is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and Sipef NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sipef NV 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 Sipef NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sipef NV has no effect on the direction of EVS Broadcast i.e., EVS Broadcast and Sipef NV go up and down completely randomly.

Pair Corralation between EVS Broadcast and Sipef NV

Assuming the 90 days trading horizon EVS Broadcast Equipment is expected to generate 2.12 times more return on investment than Sipef NV. However, EVS Broadcast is 2.12 times more volatile than Sipef NV. It trades about 0.2 of its potential returns per unit of risk. Sipef NV is currently generating about 0.16 per unit of risk. If you would invest  3,090  in EVS Broadcast Equipment on December 28, 2024 and sell it today you would earn a total of  705.00  from holding EVS Broadcast Equipment or generate 22.82% return on investment over 90 days.

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

EVS Broadcast Equipment  vs.  Sipef NV

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 16 (%) 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.

Sipef NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sipef NV are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Sipef NV may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with EVS Broadcast and Sipef NV

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

The idea behind EVS Broadcast Equipment and Sipef NV 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.