Correlation Between Evertec and Rekor Systems

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

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

Diversification Opportunities for Evertec and Rekor Systems

-0.73

Correlation Coefficient

Evertec  Rekor Systems

Pay attention - limited upside

The 3 months correlation between Evertec and Rekor is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Evertec and Rekor Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rekor Systems 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 Rekor Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rekor Systems has no effect on the direction of Evertec i.e., Evertec and Rekor Systems go up and down completely randomly.

Pair Corralation between Evertec and Rekor Systems

Given the investment horizon of 90 days Evertec is expected to generate 1.45 times less return on investment than Rekor Systems. But when comparing it to its historical volatility, Evertec is 4.85 times less risky than Rekor Systems. It trades about 0.06 of its potential returns per unit of risk. Rekor Systems is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  130.00  in Rekor Systems on December 27, 2024 and sell it today you would lose (29.87) from holding Rekor Systems or give up 22.98% of portfolio value over 90 days.

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

Evertec  vs.  Rekor Systems

Evertec

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Evertec are ranked lower than 4 (%) 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.

Rekor Systems

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rekor Systems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward-looking signals, Rekor Systems reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evertec and Rekor Systems

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

The idea behind Evertec and Rekor Systems 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.