Correlation Between Vertex and EZFL Old

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

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

Diversification Opportunities for Vertex and EZFL Old

-0.46

Correlation Coefficient

Vertex  EZFL Old

Very good diversification

The 3 months correlation between Vertex and EZFL is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Vertex and EZFL Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EZFL Old and Vertex 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 Vertex are associated (or correlated) with EZFL Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EZFL Old has no effect on the direction of Vertex i.e., Vertex and EZFL Old go up and down completely randomly.

Pair Corralation between Vertex and EZFL Old

Given the investment horizon of 90 days Vertex is expected to under-perform the EZFL Old. But the stock apears to be less risky and, when comparing its historical volatility, Vertex is 2.05 times less risky than EZFL Old. The stock trades about -0.16 of its potential returns per unit of risk. The EZFL Old is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  332.00  in EZFL Old on December 29, 2024 and sell it today you would earn a total of  18.00  from holding EZFL Old or generate 5.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	52.46%
Values	Daily Returns

Vertex  vs.  EZFL Old

Vertex

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vertex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

EZFL Old

Risk-Adjusted Performance

Insignificant

Over the last 90 days EZFL Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite conflicting technical and fundamental indicators, EZFL Old disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vertex and EZFL Old

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

The idea behind Vertex and EZFL Old 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.