Correlation Between Haleon Plc and EVIO

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

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

Diversification Opportunities for Haleon Plc and EVIO

-0.3

Correlation Coefficient

Haleon Plc  EVIO

Very good diversification

The 3 months correlation between Haleon and EVIO is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Haleon plc and EVIO Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVIO Inc and Haleon Plc 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 Haleon plc are associated (or correlated) with EVIO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVIO Inc has no effect on the direction of Haleon Plc i.e., Haleon Plc and EVIO go up and down completely randomly.

Pair Corralation between Haleon Plc and EVIO

Considering the 90-day investment horizon Haleon plc is expected to under-perform the EVIO. But the stock apears to be less risky and, when comparing its historical volatility, Haleon plc is 334.71 times less risky than EVIO. The stock trades about -0.13 of its potential returns per unit of risk. The EVIO Inc is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  0.00  in EVIO Inc on September 26, 2024 and sell it today you would earn a total of  0.00  from holding EVIO Inc or generate 0.0% return on investment over 90 days.

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

Haleon plc  vs.  EVIO Inc

Haleon plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Haleon plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

EVIO Inc

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in EVIO Inc are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent forward indicators, EVIO displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Haleon Plc and EVIO

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

The idea behind Haleon plc and EVIO Inc 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.