Correlation Between Eve Holding and Applied Industrial

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

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

Diversification Opportunities for Eve Holding and Applied Industrial

0.61

Correlation Coefficient

Eve Holding  Applied Industrial

Poor diversification

The 3 months correlation between Eve and Applied is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Eve Holding and Applied Industrial Technologie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Industrial and Eve Holding 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 Eve Holding are associated (or correlated) with Applied Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Industrial has no effect on the direction of Eve Holding i.e., Eve Holding and Applied Industrial go up and down completely randomly.

Pair Corralation between Eve Holding and Applied Industrial

Given the investment horizon of 90 days Eve Holding is expected to generate 5.92 times less return on investment than Applied Industrial. In addition to that, Eve Holding is 3.87 times more volatile than Applied Industrial Technologies. It trades about 0.01 of its total potential returns per unit of risk. Applied Industrial Technologies is currently generating about 0.17 per unit of volatility. If you would invest  23,329  in Applied Industrial Technologies on May 17, 2025 and sell it today you would earn a total of  3,975  from holding Applied Industrial Technologies or generate 17.04% return on investment over 90 days.

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

Eve Holding  vs.  Applied Industrial Technologie

Eve Holding

Risk-Adjusted Performance

Weakest

Over the last 90 days Eve Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Eve Holding is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Applied Industrial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Industrial Technologies are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating forward indicators, Applied Industrial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eve Holding and Applied Industrial

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

The idea behind Eve Holding and Applied Industrial Technologies 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.