Correlation Between KBC Ancora and EVS Broadcast

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

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

Diversification Opportunities for KBC Ancora and EVS Broadcast

0.86

Correlation Coefficient

KBC Ancora  EVS Broadcast

Very poor diversification

The 3 months correlation between KBC and EVS is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding KBC Ancora 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 KBC Ancora 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 KBC Ancora 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 KBC Ancora i.e., KBC Ancora and EVS Broadcast go up and down completely randomly.

Pair Corralation between KBC Ancora and EVS Broadcast

Assuming the 90 days trading horizon KBC Ancora is expected to generate 1.89 times less return on investment than EVS Broadcast. But when comparing it to its historical volatility, KBC Ancora is 1.96 times less risky than EVS Broadcast. It trades about 0.33 of its potential returns per unit of risk. EVS Broadcast Equipment is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  3,140  in EVS Broadcast Equipment on December 4, 2024 and sell it today you would earn a total of  520.00  from holding EVS Broadcast Equipment or generate 16.56% return on investment over 90 days.

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

KBC Ancora  vs.  EVS Broadcast Equipment

KBC Ancora

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in KBC Ancora are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, KBC Ancora reported solid returns over the last few months and may actually be approaching a breakup point.

EVS Broadcast Equipment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in EVS Broadcast Equipment are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, EVS Broadcast reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KBC Ancora and EVS Broadcast

The main advantage of trading using opposite KBC Ancora and EVS Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBC Ancora 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 KBC Ancora 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.