Correlation Between Stonex and Evercore Partners

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

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

Diversification Opportunities for Stonex and Evercore Partners

-0.44

Correlation Coefficient

Stonex  Evercore Partners

Very good diversification

The 3 months correlation between Stonex and Evercore is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Stonex Group and Evercore Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evercore Partners and Stonex 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 Stonex Group are associated (or correlated) with Evercore Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evercore Partners has no effect on the direction of Stonex i.e., Stonex and Evercore Partners go up and down completely randomly.

Pair Corralation between Stonex and Evercore Partners

Given the investment horizon of 90 days Stonex Group is expected to generate 1.14 times more return on investment than Evercore Partners. However, Stonex is 1.14 times more volatile than Evercore Partners. It trades about 0.13 of its potential returns per unit of risk. Evercore Partners is currently generating about -0.22 per unit of risk. If you would invest  10,376  in Stonex Group on November 28, 2024 and sell it today you would earn a total of  1,661  from holding Stonex Group or generate 16.01% return on investment over 90 days.

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

Stonex Group  vs.  Evercore Partners

Stonex Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stonex Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, Stonex showed solid returns over the last few months and may actually be approaching a breakup point.

Evercore Partners

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Stonex and Evercore Partners

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

The idea behind Stonex Group and Evercore Partners 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.