Correlation Between Evertec and CCC Intelligent

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

By analyzing existing cross correlation between Evertec and CCC Intelligent Solutions, you can compare the effects of market volatilities on Evertec and CCC Intelligent 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 CCC Intelligent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evertec and CCC Intelligent.

Diversification Opportunities for Evertec and CCC Intelligent

-0.74

Correlation Coefficient

Evertec  CCC Intelligent

Pay attention - limited upside

The 3 months correlation between Evertec and CCC is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Evertec and CCC Intelligent Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCC Intelligent Solutions 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 CCC Intelligent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCC Intelligent Solutions has no effect on the direction of Evertec i.e., Evertec and CCC Intelligent go up and down completely randomly.

Pair Corralation between Evertec and CCC Intelligent

Given the investment horizon of 90 days Evertec is expected to generate 1.79 times more return on investment than CCC Intelligent. However, Evertec is 1.79 times more volatile than CCC Intelligent Solutions. It trades about 0.07 of its potential returns per unit of risk. CCC Intelligent Solutions is currently generating about -0.31 per unit of risk. If you would invest  3,427  in Evertec on December 28, 2024 and sell it today you would earn a total of  308.00  from holding Evertec or generate 8.99% return on investment over 90 days.

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

Evertec  vs.  CCC Intelligent Solutions

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.

CCC Intelligent Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days CCC Intelligent Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Evertec and CCC Intelligent

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

The idea behind Evertec and CCC Intelligent Solutions 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.