Correlation Between EVE Health and Sims

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

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

Diversification Opportunities for EVE Health and Sims

0.0

Correlation Coefficient

EVE Health  Sims

Pay attention - limited upside

The 3 months correlation between EVE and Sims is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EVE Health Group and Sims in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sims and EVE Health 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 Health Group are associated (or correlated) with Sims. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sims has no effect on the direction of EVE Health i.e., EVE Health and Sims go up and down completely randomly.

Pair Corralation between EVE Health and Sims

If you would invest  1,102  in Sims on September 14, 2024 and sell it today you would earn a total of  171.00  from holding Sims or generate 15.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

EVE Health Group  vs.  Sims

EVE Health Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sims

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sims are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Sims unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EVE Health and Sims

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

The idea behind EVE Health Group and Sims 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.