Correlation Between Entravision Communications and ODDITY Tech

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

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

Diversification Opportunities for Entravision Communications and ODDITY Tech

0.54

Correlation Coefficient

Entravision Communications  ODDITY Tech

Very weak diversification

The 3 months correlation between Entravision and ODDITY is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Entravision Communications and ODDITY Tech Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODDITY Tech and Entravision Communications 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 Entravision Communications are associated (or correlated) with ODDITY Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODDITY Tech has no effect on the direction of Entravision Communications i.e., Entravision Communications and ODDITY Tech go up and down completely randomly.

Pair Corralation between Entravision Communications and ODDITY Tech

Considering the 90-day investment horizon Entravision Communications is expected to generate 1.07 times more return on investment than ODDITY Tech. However, Entravision Communications is 1.07 times more volatile than ODDITY Tech Ltd. It trades about 0.15 of its potential returns per unit of risk. ODDITY Tech Ltd is currently generating about 0.06 per unit of risk. If you would invest  178.00  in Entravision Communications on May 1, 2025 and sell it today you would earn a total of  58.00  from holding Entravision Communications or generate 32.58% return on investment over 90 days.

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

Entravision Communications  vs.  ODDITY Tech Ltd

Entravision Communications

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Entravision Communications are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Entravision Communications exhibited solid returns over the last few months and may actually be approaching a breakup point.

ODDITY Tech

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ODDITY Tech Ltd are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, ODDITY Tech may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Entravision Communications and ODDITY Tech

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

The idea behind Entravision Communications and ODDITY Tech Ltd 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.