Correlation Between Euronet Worldwide and F5 Networks
Can any of the company-specific risk be diversified away by investing in both Euronet Worldwide and F5 Networks 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 Euronet Worldwide and F5 Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Euronet Worldwide and F5 Networks, you can compare the effects of market volatilities on Euronet Worldwide and F5 Networks 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 Euronet Worldwide with a short position of F5 Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Euronet Worldwide and F5 Networks.
Diversification Opportunities for Euronet Worldwide and F5 Networks
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Euronet and FFIV is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Euronet Worldwide and F5 Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on F5 Networks and Euronet Worldwide 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 Euronet Worldwide are associated (or correlated) with F5 Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of F5 Networks has no effect on the direction of Euronet Worldwide i.e., Euronet Worldwide and F5 Networks go up and down completely randomly.
Pair Corralation between Euronet Worldwide and F5 Networks
Given the investment horizon of 90 days Euronet Worldwide is expected to under-perform the F5 Networks. In addition to that, Euronet Worldwide is 1.81 times more volatile than F5 Networks. It trades about -0.01 of its total potential returns per unit of risk. F5 Networks is currently generating about 0.1 per unit of volatility. If you would invest 14,577 in F5 Networks on January 25, 2024 and sell it today you would earn a total of 3,658 from holding F5 Networks or generate 25.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Euronet Worldwide vs. F5 Networks
Performance |
| Timeline |
| Euronet Worldwide |
| F5 Networks |
Euronet Worldwide and F5 Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Euronet Worldwide and F5 Networks
The main advantage of trading using opposite Euronet Worldwide and F5 Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Euronet Worldwide position performs unexpectedly, F5 Networks 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 F5 Networks will offset losses from the drop in F5 Networks' long position.| Euronet Worldwide vs. Evertec | Euronet Worldwide vs. i3 Verticals | Euronet Worldwide vs. EverCommerce | Euronet Worldwide vs. NetScout Systems |
| F5 Networks vs. Sterling Check Corp | F5 Networks vs. Repay Holdings Corp | F5 Networks vs. SPS Commerce | F5 Networks vs. Evertec |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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