Correlation Between EPAM Systems and Edgewater Technology
Can any of the company-specific risk be diversified away by investing in both EPAM Systems and Edgewater Technology 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 EPAM Systems and Edgewater Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPAM Systems and Edgewater Technology, you can compare the effects of market volatilities on EPAM Systems and Edgewater Technology 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 EPAM Systems with a short position of Edgewater Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPAM Systems and Edgewater Technology.
Diversification Opportunities for EPAM Systems and Edgewater Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EPAM and Edgewater is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EPAM Systems and Edgewater Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgewater Technology and EPAM Systems 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 EPAM Systems are associated (or correlated) with Edgewater Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgewater Technology has no effect on the direction of EPAM Systems i.e., EPAM Systems and Edgewater Technology go up and down completely randomly.
Pair Corralation between EPAM Systems and Edgewater Technology
If you would invest 29,722 in EPAM Systems on December 29, 2023 and sell it today you would lose (2,085) from holding EPAM Systems or give up 7.02% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
EPAM Systems vs. Edgewater Technology
Performance |
Timeline |
EPAM Systems |
Edgewater Technology |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
EPAM Systems and Edgewater Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EPAM Systems and Edgewater Technology
The main advantage of trading using opposite EPAM Systems and Edgewater Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPAM Systems position performs unexpectedly, Edgewater Technology 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 Edgewater Technology will offset losses from the drop in Edgewater Technology's long position.EPAM Systems vs. NextTrip | EPAM Systems vs. Clarivate Plc | EPAM Systems vs. JPMorgan Chase Co | EPAM Systems vs. Deckers Outdoor |
Edgewater Technology vs. Modine Manufacturing | Edgewater Technology vs. Tesla Inc | Edgewater Technology vs. FormFactor | Edgewater Technology vs. Visteon 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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