Correlation Between Evolve Automobile and Global X

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

By analyzing existing cross correlation between Evolve Automobile Innovation and Global X Robotics, you can compare the effects of market volatilities on Evolve Automobile and Global X 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 Evolve Automobile with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolve Automobile and Global X.

Diversification Opportunities for Evolve Automobile and Global X

0.61

Correlation Coefficient

Evolve Automobile  Global X

Poor diversification

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

Pair Corralation between Evolve Automobile and Global X

Assuming the 90 days trading horizon Evolve Automobile Innovation is expected to under-perform the Global X. In addition to that, Evolve Automobile is 1.16 times more volatile than Global X Robotics. It trades about -0.1 of its total potential returns per unit of risk. Global X Robotics is currently generating about -0.11 per unit of volatility. If you would invest  3,082  in Global X Robotics on December 30, 2024 and sell it today you would lose (332.00) from holding Global X Robotics or give up 10.77% of portfolio value over 90 days.

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

Evolve Automobile Innovation  vs.  Global X Robotics

Evolve Automobile

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evolve Automobile Innovation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Global X Robotics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global X Robotics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with Evolve Automobile and Global X

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

The idea behind Evolve Automobile Innovation and Global X Robotics 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.