Correlation Between Parade Technologies and Eva Airways

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

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

Diversification Opportunities for Parade Technologies and Eva Airways

0.51

Correlation Coefficient

Parade Technologies  Eva Airways

Very weak diversification

The 3 months correlation between Parade and Eva is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Parade Technologies and Eva Airways Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eva Airways Corp and Parade Technologies 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 Parade Technologies are associated (or correlated) with Eva Airways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eva Airways Corp has no effect on the direction of Parade Technologies i.e., Parade Technologies and Eva Airways go up and down completely randomly.

Pair Corralation between Parade Technologies and Eva Airways

Assuming the 90 days trading horizon Parade Technologies is expected to generate 0.91 times more return on investment than Eva Airways. However, Parade Technologies is 1.1 times less risky than Eva Airways. It trades about 0.24 of its potential returns per unit of risk. Eva Airways Corp is currently generating about 0.01 per unit of risk. If you would invest  55,000  in Parade Technologies on April 5, 2025 and sell it today you would earn a total of  4,000  from holding Parade Technologies or generate 7.27% return on investment over 90 days.

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

Parade Technologies  vs.  Eva Airways Corp

Parade Technologies

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Parade Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Parade Technologies may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Eva Airways Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eva Airways Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Eva Airways showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Parade Technologies and Eva Airways

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

The idea behind Parade Technologies and Eva Airways 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.