Correlation Between Melco Resorts and EVS Broadcast
Can any of the company-specific risk be diversified away by investing in both Melco Resorts 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 Melco Resorts and EVS Broadcast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melco Resorts Entertainment and EVS Broadcast Equipment, you can compare the effects of market volatilities on Melco Resorts 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 Melco Resorts with a short position of EVS Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melco Resorts and EVS Broadcast.
Diversification Opportunities for Melco Resorts and EVS Broadcast
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Melco and EVS is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Melco Resorts Entertainment 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 Melco Resorts 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 Melco Resorts Entertainment 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 Melco Resorts i.e., Melco Resorts and EVS Broadcast go up and down completely randomly.
Pair Corralation between Melco Resorts and EVS Broadcast
Assuming the 90 days trading horizon Melco Resorts Entertainment is expected to generate 1.64 times more return on investment than EVS Broadcast. However, Melco Resorts is 1.64 times more volatile than EVS Broadcast Equipment. It trades about 0.36 of its potential returns per unit of risk. EVS Broadcast Equipment is currently generating about 0.06 per unit of risk. If you would invest 426.00 in Melco Resorts Entertainment on April 24, 2025 and sell it today you would earn a total of 344.00 from holding Melco Resorts Entertainment or generate 80.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Melco Resorts Entertainment vs. EVS Broadcast Equipment
Performance |
Timeline |
Melco Resorts Entert |
EVS Broadcast Equipment |
Melco Resorts and EVS Broadcast Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Melco Resorts and EVS Broadcast
The main advantage of trading using opposite Melco Resorts and EVS Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melco Resorts 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.Melco Resorts vs. DICKS Sporting Goods | Melco Resorts vs. Gaztransport Technigaz SA | Melco Resorts vs. DeVry Education Group | Melco Resorts vs. SPORTING |
EVS Broadcast vs. Richardson Electronics | EVS Broadcast vs. Methode Electronics | EVS Broadcast vs. ARROW ELECTRONICS | EVS Broadcast vs. FIH MOBILE |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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