Correlation Between FirstCash and Evergreen Corp

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

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

Diversification Opportunities for FirstCash and Evergreen Corp

-0.77

Correlation Coefficient

FirstCash  Evergreen Corp

Pay attention - limited upside

The 3 months correlation between FirstCash and Evergreen is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding FirstCash and Evergreen Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergreen Corp and FirstCash 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 FirstCash are associated (or correlated) with Evergreen Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergreen Corp has no effect on the direction of FirstCash i.e., FirstCash and Evergreen Corp go up and down completely randomly.

Pair Corralation between FirstCash and Evergreen Corp

Given the investment horizon of 90 days FirstCash is expected to under-perform the Evergreen Corp. In addition to that, FirstCash is 15.21 times more volatile than Evergreen Corp. It trades about -0.06 of its total potential returns per unit of risk. Evergreen Corp is currently generating about 0.28 per unit of volatility. If you would invest  1,161  in Evergreen Corp on September 12, 2024 and sell it today you would earn a total of  21.00  from holding Evergreen Corp or generate 1.81% return on investment over 90 days.

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

FirstCash  vs.  Evergreen Corp

FirstCash

Risk-Adjusted Performance

0 of 100

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.

Evergreen Corp

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Evergreen Corp are ranked lower than 21 (%) 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.

Pair Trading with FirstCash and Evergreen Corp

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

The idea behind FirstCash and Evergreen Corp 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 Commodity Directory module to find actively traded commodities issued by global exchanges.