Correlation Between Bolt Projects and Everspin Technologies

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

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

Diversification Opportunities for Bolt Projects and Everspin Technologies

-0.09

Correlation Coefficient

Bolt Projects  Everspin Technologies

Good diversification

The 3 months correlation between Bolt and Everspin is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bolt Projects Holdings, and Everspin Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everspin Technologies and Bolt Projects 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 Bolt Projects Holdings, are associated (or correlated) with Everspin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everspin Technologies has no effect on the direction of Bolt Projects i.e., Bolt Projects and Everspin Technologies go up and down completely randomly.

Pair Corralation between Bolt Projects and Everspin Technologies

Assuming the 90 days horizon Bolt Projects Holdings, is expected to generate 21.63 times more return on investment than Everspin Technologies. However, Bolt Projects is 21.63 times more volatile than Everspin Technologies. It trades about 0.1 of its potential returns per unit of risk. Everspin Technologies is currently generating about 0.03 per unit of risk. If you would invest  20.00  in Bolt Projects Holdings, on October 9, 2024 and sell it today you would lose (16.00) from holding Bolt Projects Holdings, or give up 80.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	40.0%
Values	Daily Returns

Bolt Projects Holdings,  vs.  Everspin Technologies

Bolt Projects Holdings,

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bolt Projects Holdings, are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady forward-looking signals, Bolt Projects showed solid returns over the last few months and may actually be approaching a breakup point.

Everspin Technologies

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Everspin Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Everspin Technologies is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Bolt Projects and Everspin Technologies

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

The idea behind Bolt Projects Holdings, and Everspin Technologies 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.