Correlation Between Evolv Technologies and AutoZone
Can any of the company-specific risk be diversified away by investing in both Evolv Technologies and AutoZone 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 AutoZone 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 AutoZone, you can compare the effects of market volatilities on Evolv Technologies and AutoZone 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 AutoZone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolv Technologies and AutoZone.
Diversification Opportunities for Evolv Technologies and AutoZone
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Evolv and AutoZone is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Evolv Technologies Holdings and AutoZone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AutoZone 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 AutoZone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AutoZone has no effect on the direction of Evolv Technologies i.e., Evolv Technologies and AutoZone go up and down completely randomly.
Pair Corralation between Evolv Technologies and AutoZone
Given the investment horizon of 90 days Evolv Technologies Holdings is expected to generate 3.78 times more return on investment than AutoZone. However, Evolv Technologies is 3.78 times more volatile than AutoZone. It trades about 0.04 of its potential returns per unit of risk. AutoZone is currently generating about 0.04 per unit of risk. If you would invest 355.00 in Evolv Technologies Holdings on January 26, 2024 and sell it today you would earn a total of 54.00 from holding Evolv Technologies Holdings or generate 15.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Evolv Technologies Holdings vs. AutoZone
Performance |
| Timeline |
| Evolv Technologies |
| AutoZone |
Evolv Technologies and AutoZone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolv Technologies and AutoZone
The main advantage of trading using opposite Evolv Technologies and AutoZone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolv Technologies position performs unexpectedly, AutoZone 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 AutoZone will offset losses from the drop in AutoZone's long position.| Evolv Technologies vs. LogicMark | Evolv Technologies vs. SSC Security Services | Evolv Technologies vs. ICTS International NV | Evolv Technologies vs. Senstar Technologies |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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