Correlation Between Evolv Technologies and SG Blocks
Can any of the company-specific risk be diversified away by investing in both Evolv Technologies and SG Blocks 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 SG Blocks 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 SG Blocks, you can compare the effects of market volatilities on Evolv Technologies and SG Blocks 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 SG Blocks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolv Technologies and SG Blocks.
Diversification Opportunities for Evolv Technologies and SG Blocks
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Evolv and SGBX is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Evolv Technologies Holdings and SG Blocks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SG Blocks 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 SG Blocks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SG Blocks has no effect on the direction of Evolv Technologies i.e., Evolv Technologies and SG Blocks go up and down completely randomly.
Pair Corralation between Evolv Technologies and SG Blocks
Assuming the 90 days horizon Evolv Technologies Holdings is expected to generate 1.57 times more return on investment than SG Blocks. However, Evolv Technologies is 1.57 times more volatile than SG Blocks. It trades about 0.04 of its potential returns per unit of risk. SG Blocks is currently generating about -0.2 per unit of risk. If you would invest 38.00 in Evolv Technologies Holdings on August 30, 2024 and sell it today you would lose (5.00) from holding Evolv Technologies Holdings or give up 13.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolv Technologies Holdings vs. SG Blocks
Performance |
| Timeline |
| Evolv Technologies |
| SG Blocks |
Evolv Technologies and SG Blocks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolv Technologies and SG Blocks
The main advantage of trading using opposite Evolv Technologies and SG Blocks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolv Technologies position performs unexpectedly, SG Blocks 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 SG Blocks will offset losses from the drop in SG Blocks' long position.| Evolv Technologies vs. EVgo Equity Warrants | Evolv Technologies vs. Algoma Steel Group | Evolv Technologies vs. Landsea Homes |
| SG Blocks vs. Insteel Industries | SG Blocks vs. Carpenter Technology | SG Blocks vs. Haynes International | SG Blocks vs. Mueller Industries |
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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