Correlation Between Textron and Eve Holding
Can any of the company-specific risk be diversified away by investing in both Textron and Eve Holding 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 Textron and Eve Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Textron and Eve Holding, you can compare the effects of market volatilities on Textron and Eve Holding 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 Textron with a short position of Eve Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Textron and Eve Holding.
Diversification Opportunities for Textron and Eve Holding
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Textron and Eve is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Textron and Eve Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eve Holding and Textron 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 Textron are associated (or correlated) with Eve Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eve Holding has no effect on the direction of Textron i.e., Textron and Eve Holding go up and down completely randomly.
Pair Corralation between Textron and Eve Holding
Considering the 90-day investment horizon Textron is expected to generate 0.3 times more return on investment than Eve Holding. However, Textron is 3.33 times less risky than Eve Holding. It trades about 0.01 of its potential returns per unit of risk. Eve Holding is currently generating about -0.2 per unit of risk. If you would invest 8,029 in Textron on May 31, 2025 and sell it today you would lose (13.00) from holding Textron or give up 0.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Textron vs. Eve Holding
Performance |
| Timeline |
| Textron |
| Eve Holding |
Textron and Eve Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Textron and Eve Holding
The main advantage of trading using opposite Textron and Eve Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Textron position performs unexpectedly, Eve Holding 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 Eve Holding will offset losses from the drop in Eve Holding's long position.| Textron vs. Hexcel | Textron vs. Huntington Ingalls Industries | Textron vs. Curtiss Wright | Textron vs. Mercury Systems |
| Eve Holding vs. HEICO | Eve Holding vs. Vertical Aerospace | Eve Holding vs. Rolls Royce Holdings plc | Eve Holding vs. Embraer SA ADR |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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