Correlation Between Infinera and Evolv Technologies

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Can any of the company-specific risk be diversified away by investing in both Infinera and Evolv Technologies 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 Infinera and Evolv Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infinera and Evolv Technologies Holdings, you can compare the effects of market volatilities on Infinera and Evolv Technologies 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 Infinera with a short position of Evolv Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinera and Evolv Technologies.

Diversification Opportunities for Infinera and Evolv Technologies

InfineraEvolvDiversified AwayInfineraEvolvDiversified Away100%
0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between Infinera and Evolv is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Infinera and Evolv Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolv Technologies and Infinera 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 Infinera are associated (or correlated) with Evolv Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolv Technologies has no effect on the direction of Infinera i.e., Infinera and Evolv Technologies go up and down completely randomly.

Pair Corralation between Infinera and Evolv Technologies

Given the investment horizon of 90 days Infinera is expected to generate 12.25 times less return on investment than Evolv Technologies. But when comparing it to its historical volatility, Infinera is 20.33 times less risky than Evolv Technologies. It trades about 0.19 of its potential returns per unit of risk. Evolv Technologies Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  322.00  in Evolv Technologies Holdings on November 23, 2024 and sell it today you would earn a total of  37.00  from holding Evolv Technologies Holdings or generate 11.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Infinera  vs.  Evolv Technologies Holdings

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0204060
JavaScript chart by amCharts 3.21.15INFN EVLV
       Timeline  
Infinera 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Infinera are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Infinera is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb6.556.66.656.7
Evolv Technologies 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Evolv Technologies Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Evolv Technologies showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb33.544.5

Infinera and Evolv Technologies Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.93-0.66-0.39-0.12-0.0040190.09810.360.630.91.17 1234
JavaScript chart by amCharts 3.21.15INFN EVLV
       Returns  

Pair Trading with Infinera and Evolv Technologies

The main advantage of trading using opposite Infinera and Evolv Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infinera position performs unexpectedly, Evolv Technologies 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 Evolv Technologies will offset losses from the drop in Evolv Technologies' long position.
The idea behind Infinera and Evolv Technologies Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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