Correlation Between IShares Physical and EVS Broadcast

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

By analyzing existing cross correlation between iShares Physical Silver and EVS Broadcast Equipment, you can compare the effects of market volatilities on IShares Physical and EVS Broadcast 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 IShares Physical with a short position of EVS Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Physical and EVS Broadcast.

Diversification Opportunities for IShares Physical and EVS Broadcast

0.84

Correlation Coefficient

IShares Physical  EVS Broadcast

Very poor diversification

The 3 months correlation between IShares and EVS is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding iShares Physical Silver and EVS Broadcast Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVS Broadcast Equipment and IShares Physical 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 iShares Physical Silver are associated (or correlated) with EVS Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVS Broadcast Equipment has no effect on the direction of IShares Physical i.e., IShares Physical and EVS Broadcast go up and down completely randomly.

Pair Corralation between IShares Physical and EVS Broadcast

Assuming the 90 days trading horizon IShares Physical is expected to generate 1.18 times less return on investment than EVS Broadcast. But when comparing it to its historical volatility, iShares Physical Silver is 1.27 times less risky than EVS Broadcast. It trades about 0.21 of its potential returns per unit of risk. EVS Broadcast Equipment is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  3,100  in EVS Broadcast Equipment on December 30, 2024 and sell it today you would earn a total of  670.00  from holding EVS Broadcast Equipment or generate 21.61% return on investment over 90 days.

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

iShares Physical Silver  vs.  EVS Broadcast Equipment

iShares Physical Silver

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Physical Silver are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, IShares Physical unveiled solid returns over the last few months and may actually be approaching a breakup point.

EVS Broadcast Equipment

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EVS Broadcast Equipment are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, EVS Broadcast unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Physical and EVS Broadcast

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

The idea behind iShares Physical Silver and EVS Broadcast Equipment 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.