Correlation Between Bank Central and Evertec

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

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

Diversification Opportunities for Bank Central and Evertec

-0.67

Correlation Coefficient

Bank Central  Evertec

Excellent diversification

The 3 months correlation between Bank and Evertec is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Evertec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evertec and Bank Central 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 Bank Central Asia are associated (or correlated) with Evertec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evertec has no effect on the direction of Bank Central i.e., Bank Central and Evertec go up and down completely randomly.

Pair Corralation between Bank Central and Evertec

Assuming the 90 days horizon Bank Central Asia is expected to generate 0.86 times more return on investment than Evertec. However, Bank Central Asia is 1.17 times less risky than Evertec. It trades about -0.01 of its potential returns per unit of risk. Evertec is currently generating about -0.02 per unit of risk. If you would invest  1,408  in Bank Central Asia on September 13, 2025 and sell it today you would lose (183.00) from holding Bank Central Asia or give up 13.0% of portfolio value over 90 days.

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

Bank Central Asia  vs.  Evertec

Bank Central Asia

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Central Asia are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Bank Central is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Evertec

Risk-Adjusted Performance

Weakest

Over the last 90 days Evertec has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Bank Central and Evertec

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

The idea behind Bank Central Asia and Evertec 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.