Correlation Between SIEM OFFSHORE and Evotec SE

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

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

Diversification Opportunities for SIEM OFFSHORE and Evotec SE

0.23

Correlation Coefficient

SIEM OFFSHORE  Evotec SE

Modest diversification

The 3 months correlation between SIEM and Evotec is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding SIEM OFFSHORE NEW and Evotec SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evotec SE and SIEM OFFSHORE 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 SIEM OFFSHORE NEW are associated (or correlated) with Evotec SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evotec SE has no effect on the direction of SIEM OFFSHORE i.e., SIEM OFFSHORE and Evotec SE go up and down completely randomly.

Pair Corralation between SIEM OFFSHORE and Evotec SE

Assuming the 90 days trading horizon SIEM OFFSHORE NEW is expected to under-perform the Evotec SE. But the stock apears to be less risky and, when comparing its historical volatility, SIEM OFFSHORE NEW is 1.22 times less risky than Evotec SE. The stock trades about -0.01 of its potential returns per unit of risk. The Evotec SE is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  660.00  in Evotec SE on October 24, 2024 and sell it today you would earn a total of  130.00  from holding Evotec SE or generate 19.7% return on investment over 90 days.

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

SIEM OFFSHORE NEW  vs.  Evotec SE

SIEM OFFSHORE NEW

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SIEM OFFSHORE NEW has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, SIEM OFFSHORE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Evotec SE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Evotec SE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Evotec SE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SIEM OFFSHORE and Evotec SE

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

The idea behind SIEM OFFSHORE NEW and Evotec SE 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..