Correlation Between Evogene and Evolus

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

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

Diversification Opportunities for Evogene and Evolus

-0.29

Correlation Coefficient

Evogene  Evolus

Very good diversification

The 3 months correlation between Evogene and Evolus is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Evogene and Evolus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolus Inc and Evogene 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 Evogene are associated (or correlated) with Evolus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolus Inc has no effect on the direction of Evogene i.e., Evogene and Evolus go up and down completely randomly.

Pair Corralation between Evogene and Evolus

Given the investment horizon of 90 days Evogene is expected to under-perform the Evolus. But the stock apears to be less risky and, when comparing its historical volatility, Evogene is 1.28 times less risky than Evolus. The stock trades about -0.13 of its potential returns per unit of risk. The Evolus Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,089  in Evolus Inc on December 29, 2024 and sell it today you would earn a total of  116.00  from holding Evolus Inc or generate 10.65% return on investment over 90 days.

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

Evogene  vs.  Evolus Inc

Evogene

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evogene has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Evolus Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evolus Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Evolus unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evogene and Evolus

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

The idea behind Evogene and Evolus 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.