Correlation Between NL Industries and Evolv Technologies

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

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

Diversification Opportunities for NL Industries and Evolv Technologies

-0.79

Correlation Coefficient

NL Industries  Evolv Technologies

Pay attention - limited upside

The 3 months correlation between NL Industries and Evolv is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding NL Industries and Evolv Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolv Technologies and NL Industries 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 NL Industries 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 NL Industries i.e., NL Industries and Evolv Technologies go up and down completely randomly.

Pair Corralation between NL Industries and Evolv Technologies

Allowing for the 90-day total investment horizon NL Industries is expected to under-perform the Evolv Technologies. But the stock apears to be less risky and, when comparing its historical volatility, NL Industries is 1.65 times less risky than Evolv Technologies. The stock trades about -0.16 of its potential returns per unit of risk. The Evolv Technologies Holdings is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  409.00  in Evolv Technologies Holdings on May 8, 2025 and sell it today you would earn a total of  306.00  from holding Evolv Technologies Holdings or generate 74.82% return on investment over 90 days.

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

NL Industries  vs.  Evolv Technologies Holdings

NL Industries

Risk-Adjusted Performance

Weakest

Over the last 90 days NL Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in September 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Evolv Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Evolv Technologies Holdings are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal essential indicators, Evolv Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NL Industries and Evolv Technologies

The main advantage of trading using opposite NL Industries and Evolv Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NL Industries 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 NL Industries 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.