Correlation Between Evertec and Glimpse

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

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

Diversification Opportunities for Evertec and Glimpse

0.01

Correlation Coefficient

Evertec  Glimpse

Significant diversification

The 3 months correlation between Evertec and Glimpse is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Evertec and Glimpse Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glimpse Group 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 Glimpse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glimpse Group has no effect on the direction of Evertec i.e., Evertec and Glimpse go up and down completely randomly.

Pair Corralation between Evertec and Glimpse

Given the investment horizon of 90 days Evertec is expected to generate 11.88 times less return on investment than Glimpse. But when comparing it to its historical volatility, Evertec is 4.65 times less risky than Glimpse. It trades about 0.01 of its potential returns per unit of risk. Glimpse Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  367.00  in Glimpse Group on October 3, 2024 and sell it today you would lose (120.00) from holding Glimpse Group or give up 32.7% of portfolio value over 90 days.

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

Evertec  vs.  Glimpse Group

Evertec

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evertec are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Evertec is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Glimpse Group

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Glimpse Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Glimpse reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evertec and Glimpse

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

The idea behind Evertec and Glimpse Group 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.