Correlation Between Eyenovia and Stevanato Group

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

By analyzing existing cross correlation between Eyenovia and Stevanato Group SpA, you can compare the effects of market volatilities on Eyenovia and Stevanato Group 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 Eyenovia with a short position of Stevanato Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eyenovia and Stevanato Group.

Diversification Opportunities for Eyenovia and Stevanato Group

0.49

Correlation Coefficient

Eyenovia  Stevanato Group

Very weak diversification

The 3 months correlation between Eyenovia and Stevanato is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Eyenovia and Stevanato Group SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stevanato Group SpA and Eyenovia 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 Eyenovia are associated (or correlated) with Stevanato Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stevanato Group SpA has no effect on the direction of Eyenovia i.e., Eyenovia and Stevanato Group go up and down completely randomly.

Pair Corralation between Eyenovia and Stevanato Group

Given the investment horizon of 90 days Eyenovia is expected to under-perform the Stevanato Group. In addition to that, Eyenovia is 3.31 times more volatile than Stevanato Group SpA. It trades about -0.19 of its total potential returns per unit of risk. Stevanato Group SpA is currently generating about 0.04 per unit of volatility. If you would invest  2,176  in Stevanato Group SpA on December 11, 2024 and sell it today you would earn a total of  84.00  from holding Stevanato Group SpA or generate 3.86% return on investment over 90 days.

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

Eyenovia  vs.  Stevanato Group SpA

Eyenovia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eyenovia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Stevanato Group SpA

Risk-Adjusted Performance

Weak

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

Pair Trading with Eyenovia and Stevanato Group

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

The idea behind Eyenovia and Stevanato Group SpA 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.