Correlation Between Evolv Technologies and Flex

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

Diversification Opportunities for Evolv Technologies and Flex

0.56

Correlation Coefficient

Evolv Technologies  Flex

Very weak diversification

The 3 months correlation between Evolv and Flex is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Evolv Technologies Holdings and Flex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flex 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 Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flex has no effect on the direction of Evolv Technologies i.e., Evolv Technologies and Flex go up and down completely randomly.

Pair Corralation between Evolv Technologies and Flex

Given the investment horizon of 90 days Evolv Technologies Holdings is expected to under-perform the Flex. In addition to that, Evolv Technologies is 1.49 times more volatile than Flex. It trades about -0.08 of its total potential returns per unit of risk. Flex is currently generating about -0.05 per unit of volatility. If you would invest  3,912  in Flex on December 27, 2024 and sell it today you would lose (450.00) from holding Flex or give up 11.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Evolv Technologies Holdings  vs.  Flex

Evolv Technologies

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Flex

Risk-Adjusted Performance

Very Weak

Over the last 90 days Flex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Evolv Technologies and Flex

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

The idea behind Evolv Technologies Holdings and Flex 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.