Correlation Between Exponent and Euronet Worldwide
Can any of the company-specific risk be diversified away by investing in both Exponent and Euronet Worldwide 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 Exponent and Euronet Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exponent and Euronet Worldwide, you can compare the effects of market volatilities on Exponent and Euronet Worldwide 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 Exponent with a short position of Euronet Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exponent and Euronet Worldwide.
Diversification Opportunities for Exponent and Euronet Worldwide
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exponent and Euronet is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Exponent and Euronet Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euronet Worldwide and Exponent 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 Exponent are associated (or correlated) with Euronet Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euronet Worldwide has no effect on the direction of Exponent i.e., Exponent and Euronet Worldwide go up and down completely randomly.
Pair Corralation between Exponent and Euronet Worldwide
Given the investment horizon of 90 days Exponent is expected to under-perform the Euronet Worldwide. In addition to that, Exponent is 1.43 times more volatile than Euronet Worldwide. It trades about -0.05 of its total potential returns per unit of risk. Euronet Worldwide is currently generating about 0.07 per unit of volatility. If you would invest 9,941 in Euronet Worldwide on January 26, 2024 and sell it today you would earn a total of 626.00 from holding Euronet Worldwide or generate 6.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Exponent vs. Euronet Worldwide
Performance |
Timeline |
Exponent |
Euronet Worldwide |
Exponent and Euronet Worldwide Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Exponent and Euronet Worldwide
The main advantage of trading using opposite Exponent and Euronet Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exponent position performs unexpectedly, Euronet Worldwide 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 Euronet Worldwide will offset losses from the drop in Euronet Worldwide's long position.Exponent vs. CRA International | Exponent vs. Huron Consulting Group | Exponent vs. Forrester Research | Exponent vs. Resources Connection |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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