Correlation Between Evolv Technologies and EBay

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Can any of the company-specific risk be diversified away by investing in both Evolv Technologies and EBay 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 EBay 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 EBay Inc, you can compare the effects of market volatilities on Evolv Technologies and EBay 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 EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolv Technologies and EBay.

Diversification Opportunities for Evolv Technologies and EBay

-0.79
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Evolv and EBay is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Evolv Technologies Holdings and EBay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBay Inc 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 EBay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBay Inc has no effect on the direction of Evolv Technologies i.e., Evolv Technologies and EBay go up and down completely randomly.

Pair Corralation between Evolv Technologies and EBay

Given the investment horizon of 90 days Evolv Technologies Holdings is expected to generate 2.63 times more return on investment than EBay. However, Evolv Technologies is 2.63 times more volatile than EBay Inc. It trades about 0.04 of its potential returns per unit of risk. EBay Inc is currently generating about 0.01 per unit of risk. If you would invest  236.00  in Evolv Technologies Holdings on December 29, 2023 and sell it today you would earn a total of  127.00  from holding Evolv Technologies Holdings or generate 53.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Evolv Technologies Holdings  vs.  EBay Inc

 Performance 
       Timeline  
Evolv Technologies 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Evolv Technologies Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in April 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.
EBay Inc 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in EBay Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, EBay showed solid returns over the last few months and may actually be approaching a breakup point.

Evolv Technologies and EBay Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Evolv Technologies and EBay

The main advantage of trading using opposite Evolv Technologies and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolv Technologies position performs unexpectedly, EBay 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 EBay will offset losses from the drop in EBay's long position.
The idea behind Evolv Technologies Holdings and EBay Inc 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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