Correlation Between Rekor Systems and Evertec

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

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

Diversification Opportunities for Rekor Systems and Evertec

-0.62

Correlation Coefficient

Rekor Systems  Evertec

Excellent diversification

The 3 months correlation between Rekor and Evertec is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Rekor Systems and Evertec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evertec and Rekor Systems 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 Rekor Systems 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 Rekor Systems i.e., Rekor Systems and Evertec go up and down completely randomly.

Pair Corralation between Rekor Systems and Evertec

Given the investment horizon of 90 days Rekor Systems is expected to under-perform the Evertec. In addition to that, Rekor Systems is 3.1 times more volatile than Evertec. It trades about -0.08 of its total potential returns per unit of risk. Evertec is currently generating about 0.04 per unit of volatility. If you would invest  3,386  in Evertec on September 14, 2024 and sell it today you would earn a total of  109.00  from holding Evertec or generate 3.22% return on investment over 90 days.

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

Rekor Systems  vs.  Evertec

Rekor Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rekor Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Evertec

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Evertec are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Evertec is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Rekor Systems and Evertec

The main advantage of trading using opposite Rekor Systems and Evertec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rekor Systems 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 Rekor Systems 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.