Correlation Between Evolv Technologies and IONQ

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

Diversification Opportunities for Evolv Technologies and IONQ

-0.46

Correlation Coefficient

Evolv Technologies  IONQ

Very good diversification

The 3 months correlation between Evolv and IONQ is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Evolv Technologies Holdings and IONQ Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IONQ Inc 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 IONQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IONQ Inc has no effect on the direction of Evolv Technologies i.e., Evolv Technologies and IONQ go up and down completely randomly.

Pair Corralation between Evolv Technologies and IONQ

Assuming the 90 days horizon Evolv Technologies Holdings is expected to under-perform the IONQ. In addition to that, Evolv Technologies is 1.37 times more volatile than IONQ Inc. It trades about -0.02 of its total potential returns per unit of risk. IONQ Inc is currently generating about 0.32 per unit of volatility. If you would invest  801.00  in IONQ Inc on September 21, 2024 and sell it today you would earn a total of  2,975  from holding IONQ Inc or generate 371.41% return on investment over 90 days.

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

Evolv Technologies Holdings  vs.  IONQ Inc

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 weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

IONQ Inc

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in IONQ Inc are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, IONQ reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evolv Technologies and IONQ

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

The idea behind Evolv Technologies Holdings and IONQ Inc 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.