Correlation Between Evolv Technologies and Mueller Industries

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

Diversification Opportunities for Evolv Technologies and Mueller Industries

-0.84

Correlation Coefficient

Evolv Technologies  Mueller Industries

Pay attention - limited upside

The 3 months correlation between Evolv and Mueller is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Evolv Technologies Holdings and Mueller Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mueller Industries 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 Mueller Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mueller Industries has no effect on the direction of Evolv Technologies i.e., Evolv Technologies and Mueller Industries go up and down completely randomly.

Pair Corralation between Evolv Technologies and Mueller Industries

Assuming the 90 days horizon Evolv Technologies Holdings is expected to under-perform the Mueller Industries. In addition to that, Evolv Technologies is 4.23 times more volatile than Mueller Industries. It trades about -0.01 of its total potential returns per unit of risk. Mueller Industries is currently generating about 0.05 per unit of volatility. If you would invest  7,347  in Mueller Industries on September 19, 2024 and sell it today you would earn a total of  524.00  from holding Mueller Industries or generate 7.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Evolv Technologies Holdings  vs.  Mueller Industries

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 fairly stable basic indicators, Evolv Technologies is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Mueller Industries

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mueller Industries are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating essential indicators, Mueller Industries may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Evolv Technologies and Mueller Industries

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

The idea behind Evolv Technologies Holdings and Mueller Industries 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.