Correlation Between Evertz Technologies and ESGL Holdings

Can any of the company-specific risk be diversified away by investing in both Evertz Technologies and ESGL Holdings 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 ESGL Holdings 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 ESGL Holdings Limited, you can compare the effects of market volatilities on Evertz Technologies and ESGL Holdings 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 ESGL Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evertz Technologies and ESGL Holdings.

Diversification Opportunities for Evertz Technologies and ESGL Holdings

-0.12

Correlation Coefficient

Evertz Technologies  ESGL Holdings

Good diversification

The 3 months correlation between Evertz and ESGL is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Evertz Technologies Limited and ESGL Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESGL Holdings Limited 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 ESGL Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESGL Holdings Limited has no effect on the direction of Evertz Technologies i.e., Evertz Technologies and ESGL Holdings go up and down completely randomly.

Pair Corralation between Evertz Technologies and ESGL Holdings

Assuming the 90 days horizon Evertz Technologies Limited is expected to under-perform the ESGL Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Evertz Technologies Limited is 10.87 times less risky than ESGL Holdings. The pink sheet trades about 0.0 of its potential returns per unit of risk. The ESGL Holdings Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1.57  in ESGL Holdings Limited on October 23, 2024 and sell it today you would lose (0.05) from holding ESGL Holdings Limited or give up 3.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	75.81%
Values	Daily Returns

Evertz Technologies Limited  vs.  ESGL Holdings Limited

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.

ESGL Holdings Limited

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ESGL Holdings Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating essential indicators, ESGL Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evertz Technologies and ESGL Holdings

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

The idea behind Evertz Technologies Limited and ESGL Holdings Limited 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.