Correlation Between Evolv Technologies and KULR Technology

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

Diversification Opportunities for Evolv Technologies and KULR Technology

-0.31

Correlation Coefficient

Evolv Technologies  KULR Technology

Very good diversification

The 3 months correlation between Evolv and KULR is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Evolv Technologies Holdings and KULR Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KULR Technology Group 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 KULR Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KULR Technology Group has no effect on the direction of Evolv Technologies i.e., Evolv Technologies and KULR Technology go up and down completely randomly.

Pair Corralation between Evolv Technologies and KULR Technology

Given the investment horizon of 90 days Evolv Technologies Holdings is expected to under-perform the KULR Technology. In addition to that, Evolv Technologies is 1.39 times more volatile than KULR Technology Group. It trades about -0.15 of its total potential returns per unit of risk. KULR Technology Group is currently generating about 0.33 per unit of volatility. If you would invest  31.00  in KULR Technology Group on August 16, 2024 and sell it today you would earn a total of  18.00  from holding KULR Technology Group or generate 58.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Evolv Technologies Holdings  vs.  KULR Technology Group

Evolv Technologies

Risk-Adjusted Performance

0 of 100

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 inconsistent performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in December 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

KULR Technology Group

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in KULR Technology Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting essential indicators, KULR Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evolv Technologies and KULR Technology

The main advantage of trading using opposite Evolv Technologies and KULR Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolv Technologies position performs unexpectedly, KULR Technology 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 KULR Technology will offset losses from the drop in KULR Technology's long position.

The idea behind Evolv Technologies Holdings and KULR Technology Group 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.