Correlation Between Everspin Technologies and 50249AAJ2

Can any of the company-specific risk be diversified away by investing in both Everspin Technologies and 50249AAJ2 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 50249AAJ2 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Everspin Technologies and LYB INTERNATIONAL FINANCE, you can compare the effects of market volatilities on Everspin Technologies and 50249AAJ2 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 50249AAJ2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everspin Technologies and 50249AAJ2.

Diversification Opportunities for Everspin Technologies and 50249AAJ2

-0.27

Correlation Coefficient

Everspin Technologies  50249AAJ2

Very good diversification

The 3 months correlation between Everspin and 50249AAJ2 is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Everspin Technologies and LYB INTERNATIONAL FINANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYB INTERNATIONAL FINANCE 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 50249AAJ2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYB INTERNATIONAL FINANCE has no effect on the direction of Everspin Technologies i.e., Everspin Technologies and 50249AAJ2 go up and down completely randomly.

Pair Corralation between Everspin Technologies and 50249AAJ2

Given the investment horizon of 90 days Everspin Technologies is expected to generate 1.64 times more return on investment than 50249AAJ2. However, Everspin Technologies is 1.64 times more volatile than LYB INTERNATIONAL FINANCE. It trades about 0.02 of its potential returns per unit of risk. LYB INTERNATIONAL FINANCE is currently generating about 0.01 per unit of risk. If you would invest  635.00  in Everspin Technologies on October 11, 2024 and sell it today you would earn a total of  3.00  from holding Everspin Technologies or generate 0.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

Everspin Technologies  vs.  LYB INTERNATIONAL FINANCE

Everspin Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Everspin Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Everspin Technologies is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

LYB INTERNATIONAL FINANCE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LYB INTERNATIONAL FINANCE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 50249AAJ2 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Everspin Technologies and 50249AAJ2

The main advantage of trading using opposite Everspin Technologies and 50249AAJ2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everspin Technologies position performs unexpectedly, 50249AAJ2 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 50249AAJ2 will offset losses from the drop in 50249AAJ2's long position.

The idea behind Everspin Technologies and LYB INTERNATIONAL FINANCE 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.