Correlation Between EVS Broadcast and UCB SA
Can any of the company-specific risk be diversified away by investing in both EVS Broadcast and UCB SA 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 UCB SA 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 UCB SA, you can compare the effects of market volatilities on EVS Broadcast and UCB SA 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 UCB SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVS Broadcast and UCB SA.
Diversification Opportunities for EVS Broadcast and UCB SA
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between EVS and UCB is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and UCB SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UCB SA 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 UCB SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UCB SA has no effect on the direction of EVS Broadcast i.e., EVS Broadcast and UCB SA go up and down completely randomly.
Pair Corralation between EVS Broadcast and UCB SA
Assuming the 90 days trading horizon EVS Broadcast is expected to generate 1.08 times less return on investment than UCB SA. But when comparing it to its historical volatility, EVS Broadcast Equipment is 1.19 times less risky than UCB SA. It trades about 0.37 of its potential returns per unit of risk. UCB SA is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 16,600 in UCB SA on September 18, 2024 and sell it today you would earn a total of 1,950 from holding UCB SA or generate 11.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
EVS Broadcast Equipment vs. UCB SA
Performance |
Timeline |
EVS Broadcast Equipment |
UCB SA |
EVS Broadcast and UCB SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EVS Broadcast and UCB SA
The main advantage of trading using opposite EVS Broadcast and UCB SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVS Broadcast position performs unexpectedly, UCB SA 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 UCB SA will offset losses from the drop in UCB SA's long position.EVS Broadcast vs. Crescent NV | EVS Broadcast vs. Exmar NV | EVS Broadcast vs. KBC Ancora | EVS Broadcast vs. Ackermans Van Haaren |
Check out your portfolio center.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 Transaction History module to view history of all your transactions and understand their impact on performance.
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