Correlation Between Evertec and A10 Network

Can any of the company-specific risk be diversified away by investing in both Evertec and A10 Network 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 Evertec and A10 Network into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Evertec and A10 Network, you can compare the effects of market volatilities on Evertec and A10 Network 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 Evertec with a short position of A10 Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evertec and A10 Network.

Diversification Opportunities for Evertec and A10 Network

-0.12

Correlation Coefficient

Evertec  A10 Network

Good diversification

The 3 months correlation between Evertec and A10 is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Evertec and A10 Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A10 Network and Evertec 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 Evertec are associated (or correlated) with A10 Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A10 Network has no effect on the direction of Evertec i.e., Evertec and A10 Network go up and down completely randomly.

Pair Corralation between Evertec and A10 Network

Given the investment horizon of 90 days Evertec is expected to generate 0.89 times more return on investment than A10 Network. However, Evertec is 1.13 times less risky than A10 Network. It trades about 0.07 of its potential returns per unit of risk. A10 Network is currently generating about -0.02 per unit of risk. If you would invest  3,360  in Evertec on December 19, 2024 and sell it today you would earn a total of  328.00  from holding Evertec or generate 9.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Evertec  vs.  A10 Network

Evertec

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Evertec are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Evertec may actually be approaching a critical reversion point that can send shares even higher in April 2025.

A10 Network

Risk-Adjusted Performance

Very Weak

Over the last 90 days A10 Network has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, A10 Network is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Evertec and A10 Network

The main advantage of trading using opposite Evertec and A10 Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evertec position performs unexpectedly, A10 Network 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 A10 Network will offset losses from the drop in A10 Network's long position.

The idea behind Evertec and A10 Network 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.