Correlation Between LogicMark and Evolv Technologies

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

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

Diversification Opportunities for LogicMark and Evolv Technologies

0.35

Correlation Coefficient

LogicMark  Evolv Technologies

Weak diversification

The 3 months correlation between LogicMark and Evolv is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding LogicMark and Evolv Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolv Technologies and LogicMark 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 LogicMark are associated (or correlated) with Evolv Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolv Technologies has no effect on the direction of LogicMark i.e., LogicMark and Evolv Technologies go up and down completely randomly.

Pair Corralation between LogicMark and Evolv Technologies

Given the investment horizon of 90 days LogicMark is expected to under-perform the Evolv Technologies. But the stock apears to be less risky and, when comparing its historical volatility, LogicMark is 1.03 times less risky than Evolv Technologies. The stock trades about -0.05 of its potential returns per unit of risk. The Evolv Technologies Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  48.00  in Evolv Technologies Holdings on September 14, 2024 and sell it today you would lose (17.00) from holding Evolv Technologies Holdings or give up 35.42% of portfolio value over 90 days.

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

LogicMark  vs.  Evolv Technologies Holdings

LogicMark

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LogicMark has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's primary indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Evolv Technologies

Risk-Adjusted Performance

0 of 100

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

Pair Trading with LogicMark and Evolv Technologies

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

The idea behind LogicMark and Evolv Technologies Holdings 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.