Correlation Between Evertec and Mogo

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

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

Diversification Opportunities for Evertec and Mogo

0.82

Correlation Coefficient

Evertec  Mogo

Very poor diversification

The 3 months correlation between Evertec and Mogo is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Evertec and Mogo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mogo Inc 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 Mogo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mogo Inc has no effect on the direction of Evertec i.e., Evertec and Mogo go up and down completely randomly.

Pair Corralation between Evertec and Mogo

Given the investment horizon of 90 days Evertec is expected to generate 3.36 times less return on investment than Mogo. But when comparing it to its historical volatility, Evertec is 2.98 times less risky than Mogo. It trades about 0.07 of its potential returns per unit of risk. Mogo Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  123.00  in Mogo Inc on September 2, 2024 and sell it today you would earn a total of  26.00  from holding Mogo Inc or generate 21.14% return on investment over 90 days.

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

Evertec  vs.  Mogo Inc

Evertec

Risk-Adjusted Performance

5 of 100

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 January 2025.

Mogo Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mogo Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal technical and fundamental indicators, Mogo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evertec and Mogo

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

The idea behind Evertec and Mogo Inc 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.