Correlation Between Evertec and AudioCodes

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

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

Diversification Opportunities for Evertec and AudioCodes

-0.39

Correlation Coefficient

Evertec  AudioCodes

Very good diversification

The 3 months correlation between Evertec and AudioCodes is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Evertec and AudioCodes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AudioCodes and Evertec 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 Evertec are associated (or correlated) with AudioCodes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AudioCodes has no effect on the direction of Evertec i.e., Evertec and AudioCodes go up and down completely randomly.

Pair Corralation between Evertec and AudioCodes

Given the investment horizon of 90 days Evertec is expected to under-perform the AudioCodes. But the stock apears to be less risky and, when comparing its historical volatility, Evertec is 2.67 times less risky than AudioCodes. The stock trades about -0.01 of its potential returns per unit of risk. The AudioCodes is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  940.00  in AudioCodes on May 1, 2025 and sell it today you would earn a total of  64.00  from holding AudioCodes or generate 6.81% return on investment over 90 days.

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

Evertec  vs.  AudioCodes

Evertec

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evertec has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Evertec is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

AudioCodes

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AudioCodes are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, AudioCodes may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Evertec and AudioCodes

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

The idea behind Evertec and AudioCodes 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..