Correlation Between Evertec and FirstCash

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

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

Diversification Opportunities for Evertec and FirstCash

-0.01

Correlation Coefficient

Evertec  FirstCash

Good diversification

The 3 months correlation between Evertec and FirstCash is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Evertec and FirstCash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstCash 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 FirstCash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstCash has no effect on the direction of Evertec i.e., Evertec and FirstCash go up and down completely randomly.

Pair Corralation between Evertec and FirstCash

Given the investment horizon of 90 days Evertec is expected to under-perform the FirstCash. But the stock apears to be less risky and, when comparing its historical volatility, Evertec is 1.26 times less risky than FirstCash. The stock trades about -0.03 of its potential returns per unit of risk. The FirstCash is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  13,226  in FirstCash on May 1, 2025 and sell it today you would lose (204.00) from holding FirstCash or give up 1.54% of portfolio value over 90 days.

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

Evertec  vs.  FirstCash

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.

FirstCash

Risk-Adjusted Performance

Very Weak

Over the last 90 days FirstCash has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, FirstCash is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Evertec and FirstCash

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

The idea behind Evertec and FirstCash 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.