Correlation Between Evolv Technologies and M Tron

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

Diversification Opportunities for Evolv Technologies and M Tron

0.52

Correlation Coefficient

Evolv Technologies  M Tron

Very weak diversification

The 3 months correlation between Evolv and MPTI is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Evolv Technologies Holdings and M tron Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M tron Industries 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 M Tron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M tron Industries has no effect on the direction of Evolv Technologies i.e., Evolv Technologies and M Tron go up and down completely randomly.

Pair Corralation between Evolv Technologies and M Tron

Given the investment horizon of 90 days Evolv Technologies Holdings is expected to under-perform the M Tron. But the stock apears to be less risky and, when comparing its historical volatility, Evolv Technologies Holdings is 1.25 times less risky than M Tron. The stock trades about -0.08 of its potential returns per unit of risk. The M tron Industries is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  5,062  in M tron Industries on December 27, 2024 and sell it today you would lose (767.00) from holding M tron Industries or give up 15.15% of portfolio value over 90 days.

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

Evolv Technologies Holdings  vs.  M tron Industries

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.

M tron Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days M tron Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Evolv Technologies and M Tron

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

The idea behind Evolv Technologies Holdings and M tron Industries 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.