Correlation Between AES and EVN AG
Can any of the company-specific risk be diversified away by investing in both AES and EVN AG 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 AES and EVN AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The AES and EVN AG, you can compare the effects of market volatilities on AES and EVN AG 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 AES with a short position of EVN AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of AES and EVN AG.
Diversification Opportunities for AES and EVN AG
Modest diversification
The 3 months correlation between AES and EVN is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding The AES and EVN AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVN AG and AES 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 The AES are associated (or correlated) with EVN AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVN AG has no effect on the direction of AES i.e., AES and EVN AG go up and down completely randomly.
Pair Corralation between AES and EVN AG
Assuming the 90 days horizon The AES is expected to under-perform the EVN AG. In addition to that, AES is 1.21 times more volatile than EVN AG. It trades about -0.01 of its total potential returns per unit of risk. EVN AG is currently generating about 0.04 per unit of volatility. If you would invest 2,109 in EVN AG on January 25, 2024 and sell it today you would earn a total of 596.00 from holding EVN AG or generate 28.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
The AES vs. EVN AG
Performance |
Timeline |
AES |
EVN AG |
AES and EVN AG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AES and EVN AG
The main advantage of trading using opposite AES and EVN AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AES position performs unexpectedly, EVN AG 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 EVN AG will offset losses from the drop in EVN AG's long position.The idea behind The AES and EVN AG 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.EVN AG vs. ELMOS SEMICONDUCTOR | EVN AG vs. X FAB Silicon Foundries | EVN AG vs. Clean Energy Fuels | EVN AG vs. LIFECLEAN INTL AB |
Check out your portfolio center.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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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