Correlation Between SMA SOLAR and EVS Broadcast

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

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

Diversification Opportunities for SMA SOLAR and EVS Broadcast

0.0

Correlation Coefficient

SMA SOLAR  EVS Broadcast

Pay attention - limited upside

The 3 months correlation between SMA and EVS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SMA SOLAR T and EVS Broadcast Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVS Broadcast Equipment and SMA SOLAR 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 SMA SOLAR T are associated (or correlated) with EVS Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVS Broadcast Equipment has no effect on the direction of SMA SOLAR i.e., SMA SOLAR and EVS Broadcast go up and down completely randomly.

Pair Corralation between SMA SOLAR and EVS Broadcast

If you would invest  1,938  in EVS Broadcast Equipment on October 27, 2024 and sell it today you would earn a total of  1,097  from holding EVS Broadcast Equipment or generate 56.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.2%
Values	Daily Returns

SMA SOLAR T  vs.  EVS Broadcast Equipment

SMA SOLAR T

Risk-Adjusted Performance

0 of 100

Very Weak

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

EVS Broadcast Equipment

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EVS Broadcast Equipment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, EVS Broadcast may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with SMA SOLAR and EVS Broadcast

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

The idea behind SMA SOLAR T and EVS Broadcast Equipment 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.