Correlation Between Edgewater Technology and EPAM Systems
Can any of the company-specific risk be diversified away by investing in both Edgewater Technology and EPAM Systems 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 Edgewater Technology and EPAM Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edgewater Technology and EPAM Systems, you can compare the effects of market volatilities on Edgewater Technology and EPAM Systems 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 Edgewater Technology with a short position of EPAM Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewater Technology and EPAM Systems.
Diversification Opportunities for Edgewater Technology and EPAM Systems
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Edgewater and EPAM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Edgewater Technology and EPAM Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPAM Systems and Edgewater Technology 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 Edgewater Technology are associated (or correlated) with EPAM Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPAM Systems has no effect on the direction of Edgewater Technology i.e., Edgewater Technology and EPAM Systems go up and down completely randomly.
Pair Corralation between Edgewater Technology and EPAM Systems
If you would invest 0.00 in Edgewater Technology on January 25, 2024 and sell it today you would earn a total of 0.00 from holding Edgewater Technology or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 2.38% |
| Values | Daily Returns |
Edgewater Technology vs. EPAM Systems
Performance |
| Timeline |
| Edgewater Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| EPAM Systems |
Edgewater Technology and EPAM Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edgewater Technology and EPAM Systems
The main advantage of trading using opposite Edgewater Technology and EPAM Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewater Technology position performs unexpectedly, EPAM Systems 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 EPAM Systems will offset losses from the drop in EPAM Systems' long position.| Edgewater Technology vs. Cedar Fair LP | Edgewater Technology vs. Repligen | Edgewater Technology vs. RBC Bearings Incorporated | Edgewater Technology vs. Westinghouse Air Brake |
| EPAM Systems vs. Wipro Limited ADR | EPAM Systems vs. Accenture plc | EPAM Systems vs. CACI International | EPAM Systems vs. CDW Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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