Correlation Between Evolv Technologies and ESAB Corp
Can any of the company-specific risk be diversified away by investing in both Evolv Technologies and ESAB Corp 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 ESAB Corp 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 ESAB Corp, you can compare the effects of market volatilities on Evolv Technologies and ESAB Corp 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 ESAB Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolv Technologies and ESAB Corp.
Diversification Opportunities for Evolv Technologies and ESAB Corp
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Evolv and ESAB is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Evolv Technologies Holdings and ESAB Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESAB Corp 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 ESAB Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESAB Corp has no effect on the direction of Evolv Technologies i.e., Evolv Technologies and ESAB Corp go up and down completely randomly.
Pair Corralation between Evolv Technologies and ESAB Corp
Assuming the 90 days horizon Evolv Technologies Holdings is expected to generate 7.09 times more return on investment than ESAB Corp. However, Evolv Technologies is 7.09 times more volatile than ESAB Corp. It trades about 0.27 of its potential returns per unit of risk. ESAB Corp is currently generating about 0.06 per unit of risk. If you would invest 17.00 in Evolv Technologies Holdings on August 30, 2024 and sell it today you would earn a total of 16.00 from holding Evolv Technologies Holdings or generate 94.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolv Technologies Holdings vs. ESAB Corp
Performance |
| Timeline |
| Evolv Technologies |
| ESAB Corp |
Evolv Technologies and ESAB Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolv Technologies and ESAB Corp
The main advantage of trading using opposite Evolv Technologies and ESAB Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolv Technologies position performs unexpectedly, ESAB Corp 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 ESAB Corp will offset losses from the drop in ESAB Corp's long position.| Evolv Technologies vs. EVgo Equity Warrants | Evolv Technologies vs. Algoma Steel Group | Evolv Technologies vs. Landsea Homes |
| ESAB Corp vs. Northwest Pipe | ESAB Corp vs. Haynes International | ESAB Corp vs. Mayville Engineering Co | ESAB Corp vs. Ryerson Holding 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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