Correlation Between Evertz Technologies and DEUTSCHE

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

Diversification Opportunities for Evertz Technologies and DEUTSCHE

-0.42

Correlation Coefficient

Evertz Technologies  DEUTSCHE

Very good diversification

The 3 months correlation between Evertz and DEUTSCHE is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Evertz Technologies Limited and DEUTSCHE TELEKOM INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEUTSCHE TELEKOM INTL 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 DEUTSCHE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEUTSCHE TELEKOM INTL has no effect on the direction of Evertz Technologies i.e., Evertz Technologies and DEUTSCHE go up and down completely randomly.

Pair Corralation between Evertz Technologies and DEUTSCHE

Assuming the 90 days horizon Evertz Technologies Limited is expected to under-perform the DEUTSCHE. In addition to that, Evertz Technologies is 3.29 times more volatile than DEUTSCHE TELEKOM INTL. It trades about -0.07 of its total potential returns per unit of risk. DEUTSCHE TELEKOM INTL is currently generating about 0.0 per unit of volatility. If you would invest  12,422  in DEUTSCHE TELEKOM INTL on December 24, 2024 and sell it today you would earn a total of  3.00  from holding DEUTSCHE TELEKOM INTL or generate 0.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.48%
Values	Daily Returns

Evertz Technologies Limited  vs.  DEUTSCHE TELEKOM INTL

Evertz Technologies

Risk-Adjusted Performance

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 latest conflicting performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

DEUTSCHE TELEKOM INTL

Risk-Adjusted Performance

Very Weak

Over the last 90 days DEUTSCHE TELEKOM INTL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, DEUTSCHE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Evertz Technologies and DEUTSCHE

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

The idea behind Evertz Technologies Limited and DEUTSCHE TELEKOM INTL 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.