Correlation Between Evolv Technologies and PAR Technology

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

Diversification Opportunities for Evolv Technologies and PAR Technology

0.25

Correlation Coefficient

Evolv Technologies  PAR Technology

Modest diversification

The 3 months correlation between Evolv and PAR is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Evolv Technologies Holdings and PAR Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAR Technology 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 PAR Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAR Technology has no effect on the direction of Evolv Technologies i.e., Evolv Technologies and PAR Technology go up and down completely randomly.

Pair Corralation between Evolv Technologies and PAR Technology

Given the investment horizon of 90 days Evolv Technologies Holdings is expected to under-perform the PAR Technology. But the stock apears to be less risky and, when comparing its historical volatility, Evolv Technologies Holdings is 1.33 times less risky than PAR Technology. The stock trades about -0.21 of its potential returns per unit of risk. The PAR Technology is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  7,303  in PAR Technology on December 1, 2024 and sell it today you would lose (432.00) from holding PAR Technology or give up 5.92% of portfolio value over 90 days.

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

Evolv Technologies Holdings  vs.  PAR Technology

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 fairly stable essential indicators, Evolv Technologies is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

PAR Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days PAR Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Evolv Technologies and PAR Technology

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

The idea behind Evolv Technologies Holdings and PAR Technology 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.