Correlation Between Evolv Technologies and Advance Auto
Can any of the company-specific risk be diversified away by investing in both Evolv Technologies and Advance Auto 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 Advance Auto 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 Advance Auto Parts, you can compare the effects of market volatilities on Evolv Technologies and Advance Auto 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 Advance Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolv Technologies and Advance Auto.
Diversification Opportunities for Evolv Technologies and Advance Auto
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evolv and Advance is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Evolv Technologies Holdings and Advance Auto Parts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advance Auto Parts 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 Advance Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advance Auto Parts has no effect on the direction of Evolv Technologies i.e., Evolv Technologies and Advance Auto go up and down completely randomly.
Pair Corralation between Evolv Technologies and Advance Auto
Given the investment horizon of 90 days Evolv Technologies Holdings is expected to generate 2.59 times more return on investment than Advance Auto. However, Evolv Technologies is 2.59 times more volatile than Advance Auto Parts. It trades about 0.1 of its potential returns per unit of risk. Advance Auto Parts is currently generating about -0.15 per unit of risk. If you would invest 355.00 in Evolv Technologies Holdings on January 20, 2024 and sell it today you would earn a total of 39.00 from holding Evolv Technologies Holdings or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolv Technologies Holdings vs. Advance Auto Parts
Performance |
| Timeline |
| Evolv Technologies |
| Advance Auto Parts |
Evolv Technologies and Advance Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolv Technologies and Advance Auto
The main advantage of trading using opposite Evolv Technologies and Advance Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolv Technologies position performs unexpectedly, Advance Auto 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 Advance Auto will offset losses from the drop in Advance Auto's long position.| Evolv Technologies vs. Maximus | Evolv Technologies vs. Network 1 Technologies | Evolv Technologies vs. First Advantage Corp | Evolv Technologies vs. BrightView Holdings |
| Advance Auto vs. AutoZone | Advance Auto vs. Tractor Supply | Advance Auto vs. Genuine Parts Co | Advance Auto vs. Five Below |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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