Correlation Between Evertz Technologies and Dine Brands

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

By analyzing existing cross correlation between Evertz Technologies Limited and Dine Brands Global, you can compare the effects of market volatilities on Evertz Technologies and Dine Brands 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 Evertz Technologies with a short position of Dine Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evertz Technologies and Dine Brands.

Diversification Opportunities for Evertz Technologies and Dine Brands

0.01

Correlation Coefficient

Evertz Technologies  Dine Brands

Significant diversification

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

Pair Corralation between Evertz Technologies and Dine Brands

Assuming the 90 days horizon Evertz Technologies Limited is expected to generate 0.57 times more return on investment than Dine Brands. However, Evertz Technologies Limited is 1.76 times less risky than Dine Brands. It trades about -0.01 of its potential returns per unit of risk. Dine Brands Global is currently generating about -0.11 per unit of risk. If you would invest  847.00  in Evertz Technologies Limited on September 23, 2024 and sell it today you would lose (3.00) from holding Evertz Technologies Limited or give up 0.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Evertz Technologies Limited  vs.  Dine Brands Global

Evertz Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evertz Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Evertz Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Dine Brands Global

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dine Brands Global are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Dine Brands may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Evertz Technologies and Dine Brands

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

The idea behind Evertz Technologies Limited and Dine Brands Global 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.