Correlation Between Stereo Vision and Encore Capital

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

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

Diversification Opportunities for Stereo Vision and Encore Capital

0.06

Correlation Coefficient

Stereo Vision  Encore Capital

Significant diversification

The 3 months correlation between Stereo and Encore is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Stereo Vision Entertainment and Encore Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Encore Capital Group and Stereo Vision 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 Stereo Vision Entertainment are associated (or correlated) with Encore Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Encore Capital Group has no effect on the direction of Stereo Vision i.e., Stereo Vision and Encore Capital go up and down completely randomly.

Pair Corralation between Stereo Vision and Encore Capital

If you would invest  0.58  in Stereo Vision Entertainment on September 29, 2024 and sell it today you would earn a total of  0.00  from holding Stereo Vision Entertainment or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Stereo Vision Entertainment  vs.  Encore Capital Group

Stereo Vision Entert

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Stereo Vision Entertainment are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very sluggish basic indicators, Stereo Vision may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Encore Capital Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Encore Capital Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Encore Capital is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Stereo Vision and Encore Capital

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

The idea behind Stereo Vision Entertainment and Encore Capital Group 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.