Correlation Between Evolva Holding and Kudelski

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

By analyzing existing cross correlation between Evolva Holding SA and Kudelski, you can compare the effects of market volatilities on Evolva Holding and Kudelski 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 Evolva Holding with a short position of Kudelski. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolva Holding and Kudelski.

Diversification Opportunities for Evolva Holding and Kudelski

0.33

Correlation Coefficient

Evolva Holding  Kudelski

Weak diversification

The 3 months correlation between Evolva and Kudelski is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Evolva Holding SA and Kudelski in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kudelski and Evolva Holding 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 Evolva Holding SA are associated (or correlated) with Kudelski. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kudelski has no effect on the direction of Evolva Holding i.e., Evolva Holding and Kudelski go up and down completely randomly.

Pair Corralation between Evolva Holding and Kudelski

Assuming the 90 days trading horizon Evolva Holding SA is expected to generate 1.99 times more return on investment than Kudelski. However, Evolva Holding is 1.99 times more volatile than Kudelski. It trades about 0.02 of its potential returns per unit of risk. Kudelski is currently generating about 0.03 per unit of risk. If you would invest  91.00  in Evolva Holding SA on September 20, 2024 and sell it today you would lose (1.00) from holding Evolva Holding SA or give up 1.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Evolva Holding SA  vs.  Kudelski

Evolva Holding SA

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Evolva Holding SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Evolva Holding may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Kudelski

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kudelski are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental indicators, Kudelski is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Evolva Holding and Kudelski

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

The idea behind Evolva Holding SA and Kudelski 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.