Correlation Between Evolve Active and Evolve European

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Evolve Active and Evolve European 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 Evolve Active and Evolve European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolve Active Core and Evolve European Banks, you can compare the effects of market volatilities on Evolve Active and Evolve European 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 Evolve Active with a short position of Evolve European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolve Active and Evolve European.

Diversification Opportunities for Evolve Active and Evolve European

EvolveEvolveDiversified AwayEvolveEvolveDiversified Away100%
0.49
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Evolve and Evolve is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Evolve Active Core and Evolve European Banks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolve European Banks and Evolve Active 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 Evolve Active Core are associated (or correlated) with Evolve European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolve European Banks has no effect on the direction of Evolve Active i.e., Evolve Active and Evolve European go up and down completely randomly.

Pair Corralation between Evolve Active and Evolve European

Assuming the 90 days trading horizon Evolve Active is expected to generate 15.48 times less return on investment than Evolve European. But when comparing it to its historical volatility, Evolve Active Core is 3.62 times less risky than Evolve European. It trades about 0.06 of its potential returns per unit of risk. Evolve European Banks is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  1,010  in Evolve European Banks on November 24, 2024 and sell it today you would earn a total of  232.00  from holding Evolve European Banks or generate 22.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Evolve Active Core  vs.  Evolve European Banks

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -5051015
JavaScript chart by amCharts 3.21.15FIXD EBNK-B
       Timeline  
Evolve Active Core 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Evolve Active Core are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Evolve Active is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb17.817.91818.118.218.3
Evolve European Banks 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Evolve European Banks are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Evolve European sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1010.51111.51212.5

Evolve Active and Evolve European Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.09-0.79-0.49-0.19-0.0046370.170.470.771.071.37 0.51.01.52.02.53.03.5
JavaScript chart by amCharts 3.21.15FIXD EBNK-B
       Returns  

Pair Trading with Evolve Active and Evolve European

The main advantage of trading using opposite Evolve Active and Evolve European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolve Active position performs unexpectedly, Evolve European 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 Evolve European will offset losses from the drop in Evolve European's long position.
The idea behind Evolve Active Core and Evolve European Banks 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.
Check out your portfolio center.
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 CEOs Directory module to screen CEOs from public companies around the world.

Other Complementary Tools

Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Fundamental Analysis
View fundamental data based on most recent published financial statements