Correlation Between Mistras and Evolv Technologies

Can any of the company-specific risk be diversified away by investing in both Mistras 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 Mistras and Evolv Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mistras Group and Evolv Technologies Holdings, you can compare the effects of market volatilities on Mistras 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 Mistras with a short position of Evolv Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mistras and Evolv Technologies.

Diversification Opportunities for Mistras and Evolv Technologies

0.72

Correlation Coefficient

Mistras  Evolv Technologies

Poor diversification

The 3 months correlation between Mistras and Evolv is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Mistras Group and Evolv Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolv Technologies and Mistras 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 Mistras Group 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 Mistras i.e., Mistras and Evolv Technologies go up and down completely randomly.

Pair Corralation between Mistras and Evolv Technologies

Allowing for the 90-day total investment horizon Mistras Group is expected to generate 0.59 times more return on investment than Evolv Technologies. However, Mistras Group is 1.69 times less risky than Evolv Technologies. It trades about -0.16 of its potential returns per unit of risk. Evolv Technologies Holdings is currently generating about -0.15 per unit of risk. If you would invest  1,155  in Mistras Group on August 16, 2024 and sell it today you would lose (248.00) from holding Mistras Group or give up 21.47% of portfolio value over 90 days.

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

Mistras Group  vs.  Evolv Technologies Holdings

Mistras Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mistras Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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.

Pair Trading with Mistras and Evolv Technologies

The main advantage of trading using opposite Mistras and Evolv Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mistras 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 Mistras Group 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.