Correlation Between GIMV NV and EVS Broadcast

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

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

Diversification Opportunities for GIMV NV and EVS Broadcast

0.45

Correlation Coefficient

GIMV NV  EVS Broadcast

Very weak diversification

The 3 months correlation between GIMV and EVS is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding GIMV NV and EVS Broadcast Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVS Broadcast Equipment and GIMV NV 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 GIMV NV are associated (or correlated) with EVS Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVS Broadcast Equipment has no effect on the direction of GIMV NV i.e., GIMV NV and EVS Broadcast go up and down completely randomly.

Pair Corralation between GIMV NV and EVS Broadcast

Assuming the 90 days trading horizon GIMV NV is expected to generate 0.99 times more return on investment than EVS Broadcast. However, GIMV NV is 1.01 times less risky than EVS Broadcast. It trades about 0.03 of its potential returns per unit of risk. EVS Broadcast Equipment is currently generating about -0.03 per unit of risk. If you would invest  3,970  in GIMV NV on September 2, 2024 and sell it today you would earn a total of  85.00  from holding GIMV NV or generate 2.14% return on investment over 90 days.

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

GIMV NV  vs.  EVS Broadcast Equipment

GIMV NV

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GIMV NV are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, GIMV NV is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

EVS Broadcast Equipment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EVS Broadcast Equipment has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, EVS Broadcast is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with GIMV NV and EVS Broadcast

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

The idea behind GIMV NV and EVS Broadcast Equipment 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.