Correlation Between Evolv Technologies and Coda Octopus

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

Diversification Opportunities for Evolv Technologies and Coda Octopus

-0.61

Correlation Coefficient

Evolv Technologies  Coda Octopus

Excellent diversification

The 3 months correlation between Evolv and Coda is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Evolv Technologies Holdings and Coda Octopus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coda Octopus 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 Coda Octopus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coda Octopus Group has no effect on the direction of Evolv Technologies i.e., Evolv Technologies and Coda Octopus go up and down completely randomly.

Pair Corralation between Evolv Technologies and Coda Octopus

Given the investment horizon of 90 days Evolv Technologies Holdings is expected to generate 1.98 times more return on investment than Coda Octopus. However, Evolv Technologies is 1.98 times more volatile than Coda Octopus Group. It trades about 0.03 of its potential returns per unit of risk. Coda Octopus Group is currently generating about 0.04 per unit of risk. If you would invest  349.00  in Evolv Technologies Holdings on September 3, 2024 and sell it today you would earn a total of  56.00  from holding Evolv Technologies Holdings or generate 16.05% return on investment over 90 days.

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

Evolv Technologies Holdings  vs.  Coda Octopus Group

Evolv Technologies

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Evolv Technologies Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Evolv Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Coda Octopus Group

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Coda Octopus Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental indicators, Coda Octopus sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evolv Technologies and Coda Octopus

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

The idea behind Evolv Technologies Holdings and Coda Octopus 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.