Correlation Between Evergreen Corp and VBI Vaccines

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

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

Diversification Opportunities for Evergreen Corp and VBI Vaccines

-0.59

Correlation Coefficient

Evergreen Corp  VBI Vaccines

Excellent diversification

The 3 months correlation between Evergreen and VBI is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Corp and VBI Vaccines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VBI Vaccines and Evergreen Corp 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 Evergreen Corp are associated (or correlated) with VBI Vaccines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VBI Vaccines has no effect on the direction of Evergreen Corp i.e., Evergreen Corp and VBI Vaccines go up and down completely randomly.

Pair Corralation between Evergreen Corp and VBI Vaccines

If you would invest  1,167  in Evergreen Corp on September 25, 2024 and sell it today you would earn a total of  19.00  from holding Evergreen Corp or generate 1.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

Evergreen Corp  vs.  VBI Vaccines

Evergreen Corp

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Evergreen Corp are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Evergreen Corp is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

VBI Vaccines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VBI Vaccines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, VBI Vaccines is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Evergreen Corp and VBI Vaccines

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

The idea behind Evergreen Corp and VBI Vaccines 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.