Correlation Between Evertec and Remitly Global

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

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

Diversification Opportunities for Evertec and Remitly Global

0.73

Correlation Coefficient

Evertec  Remitly Global

Poor diversification

The 3 months correlation between Evertec and Remitly is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Evertec and Remitly Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Remitly Global 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 Remitly Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Remitly Global has no effect on the direction of Evertec i.e., Evertec and Remitly Global go up and down completely randomly.

Pair Corralation between Evertec and Remitly Global

Given the investment horizon of 90 days Evertec is expected to generate 1.34 times less return on investment than Remitly Global. In addition to that, Evertec is 1.09 times more volatile than Remitly Global. It trades about 0.23 of its total potential returns per unit of risk. Remitly Global is currently generating about 0.34 per unit of volatility. If you would invest  1,798  in Remitly Global on September 1, 2024 and sell it today you would earn a total of  258.00  from holding Remitly Global or generate 14.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Evertec  vs.  Remitly Global

Evertec

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Evertec are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Evertec may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Remitly Global

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Remitly Global are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal essential indicators, Remitly Global showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evertec and Remitly Global

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

The idea behind Evertec and Remitly Global 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.