Correlation Between Eve Holding and Momentus

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

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

Diversification Opportunities for Eve Holding and Momentus

0.87

Correlation Coefficient

Eve Holding  Momentus

Very poor diversification

The 3 months correlation between Eve and Momentus is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Eve Holding and Momentus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Momentus and Eve Holding 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 Eve Holding are associated (or correlated) with Momentus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Momentus has no effect on the direction of Eve Holding i.e., Eve Holding and Momentus go up and down completely randomly.

Pair Corralation between Eve Holding and Momentus

Given the investment horizon of 90 days Eve Holding is expected to generate 0.59 times more return on investment than Momentus. However, Eve Holding is 1.7 times less risky than Momentus. It trades about -0.14 of its potential returns per unit of risk. Momentus is currently generating about -0.27 per unit of risk. If you would invest  556.00  in Eve Holding on December 28, 2024 and sell it today you would lose (207.00) from holding Eve Holding or give up 37.23% of portfolio value over 90 days.

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

Eve Holding  vs.  Momentus

Eve Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eve Holding 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 technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Momentus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Momentus 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 comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Eve Holding and Momentus

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

The idea behind Eve Holding and Momentus 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 Global Correlations module to find global opportunities by holding instruments from different markets.