Correlation Between I3 Verticals and Euronet Worldwide

Can any of the company-specific risk be diversified away by investing in both I3 Verticals and Euronet Worldwide 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 I3 Verticals and Euronet Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between i3 Verticals and Euronet Worldwide, you can compare the effects of market volatilities on I3 Verticals and Euronet Worldwide 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 I3 Verticals with a short position of Euronet Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of I3 Verticals and Euronet Worldwide.

Diversification Opportunities for I3 Verticals and Euronet Worldwide

0.02

Correlation Coefficient

I3 Verticals  Euronet Worldwide

Significant diversification

The 3 months correlation between IIIV and Euronet is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding i3 Verticals and Euronet Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euronet Worldwide and I3 Verticals 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 i3 Verticals are associated (or correlated) with Euronet Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euronet Worldwide has no effect on the direction of I3 Verticals i.e., I3 Verticals and Euronet Worldwide go up and down completely randomly.

Pair Corralation between I3 Verticals and Euronet Worldwide

Given the investment horizon of 90 days I3 Verticals is expected to generate 1.63 times less return on investment than Euronet Worldwide. In addition to that, I3 Verticals is 1.01 times more volatile than Euronet Worldwide. It trades about 0.04 of its total potential returns per unit of risk. Euronet Worldwide is currently generating about 0.06 per unit of volatility. If you would invest  10,257  in Euronet Worldwide on December 28, 2024 and sell it today you would earn a total of  749.00  from holding Euronet Worldwide or generate 7.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

i3 Verticals  vs.  Euronet Worldwide

i3 Verticals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in i3 Verticals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable forward indicators, I3 Verticals is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Euronet Worldwide

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Euronet Worldwide are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, Euronet Worldwide may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with I3 Verticals and Euronet Worldwide

The main advantage of trading using opposite I3 Verticals and Euronet Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I3 Verticals position performs unexpectedly, Euronet Worldwide 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 Euronet Worldwide will offset losses from the drop in Euronet Worldwide's long position.

The idea behind i3 Verticals and Euronet Worldwide 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.