Correlation Between Everspin Technologies and Southern

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

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

Diversification Opportunities for Everspin Technologies and Southern

0.24

Correlation Coefficient

Everspin Technologies  Southern

Modest diversification

The 3 months correlation between Everspin and Southern is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Everspin Technologies and Southern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern and Everspin 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 Everspin Technologies are associated (or correlated) with Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern has no effect on the direction of Everspin Technologies i.e., Everspin Technologies and Southern go up and down completely randomly.

Pair Corralation between Everspin Technologies and Southern

Given the investment horizon of 90 days Everspin Technologies is expected to under-perform the Southern. In addition to that, Everspin Technologies is 3.07 times more volatile than Southern Co. It trades about -0.13 of its total potential returns per unit of risk. Southern Co is currently generating about 0.03 per unit of volatility. If you would invest  2,185  in Southern Co on December 21, 2024 and sell it today you would earn a total of  28.00  from holding Southern Co or generate 1.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Everspin Technologies  vs.  Southern Co

Everspin Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Everspin Technologies 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 basic 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.

Southern

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Southern Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward-looking indicators, Southern is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Everspin Technologies and Southern

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

The idea behind Everspin Technologies and Southern Co 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.