Correlation Between Nutanix and Evertec

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

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

Diversification Opportunities for Nutanix and Evertec

0.55

Correlation Coefficient

Nutanix  Evertec

Very weak diversification

The 3 months correlation between Nutanix and Evertec is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Nutanix and Evertec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evertec and Nutanix 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 Nutanix are associated (or correlated) with Evertec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evertec has no effect on the direction of Nutanix i.e., Nutanix and Evertec go up and down completely randomly.

Pair Corralation between Nutanix and Evertec

Given the investment horizon of 90 days Nutanix is expected to generate 1.18 times more return on investment than Evertec. However, Nutanix is 1.18 times more volatile than Evertec. It trades about 0.1 of its potential returns per unit of risk. Evertec is currently generating about 0.06 per unit of risk. If you would invest  6,157  in Nutanix on December 29, 2024 and sell it today you would earn a total of  1,039  from holding Nutanix or generate 16.88% return on investment over 90 days.

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

Nutanix  vs.  Evertec

Nutanix

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nutanix are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Nutanix showed solid returns over the last few months and may actually be approaching a breakup point.

Evertec

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Evertec are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Evertec may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Nutanix and Evertec

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

The idea behind Nutanix and Evertec 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.