Correlation Between Evolv Technologies and Brady
Can any of the company-specific risk be diversified away by investing in both Evolv Technologies and Brady 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 Evolv Technologies and Brady into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolv Technologies Holdings and Brady, you can compare the effects of market volatilities on Evolv Technologies and Brady 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 Evolv Technologies with a short position of Brady. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolv Technologies and Brady.
Diversification Opportunities for Evolv Technologies and Brady
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Evolv and Brady is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Evolv Technologies Holdings and Brady in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brady and Evolv Technologies 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 Evolv Technologies Holdings are associated (or correlated) with Brady. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brady has no effect on the direction of Evolv Technologies i.e., Evolv Technologies and Brady go up and down completely randomly.
Pair Corralation between Evolv Technologies and Brady
Given the investment horizon of 90 days Evolv Technologies Holdings is expected to generate 4.73 times more return on investment than Brady. However, Evolv Technologies is 4.73 times more volatile than Brady. It trades about 0.03 of its potential returns per unit of risk. Brady is currently generating about 0.1 per unit of risk. If you would invest 397.00 in Evolv Technologies Holdings on November 2, 2024 and sell it today you would earn a total of 3.00 from holding Evolv Technologies Holdings or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolv Technologies Holdings vs. Brady
Performance |
| Timeline |
| Evolv Technologies |
| Brady |
Evolv Technologies and Brady Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolv Technologies and Brady
The main advantage of trading using opposite Evolv Technologies and Brady positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolv Technologies position performs unexpectedly, Brady 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 Brady will offset losses from the drop in Brady's long position.| Evolv Technologies vs. First Responder Technologies | Evolv Technologies vs. Knightscope | Evolv Technologies vs. LogicMark | Evolv Technologies vs. Guardforce AI Co |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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