Correlation Between Momentus and Eve Holding

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

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

Diversification Opportunities for Momentus and Eve Holding

0.08

Correlation Coefficient

Momentus  Eve Holding

Significant diversification

The 3 months correlation between Momentus and Eve is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Momentus and Eve Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eve Holding and Momentus 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 Momentus are associated (or correlated) with Eve Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eve Holding has no effect on the direction of Momentus i.e., Momentus and Eve Holding go up and down completely randomly.

Pair Corralation between Momentus and Eve Holding

Given the investment horizon of 90 days Momentus is expected to under-perform the Eve Holding. In addition to that, Momentus is 2.13 times more volatile than Eve Holding. It trades about -0.13 of its total potential returns per unit of risk. Eve Holding is currently generating about 0.02 per unit of volatility. If you would invest  419.00  in Eve Holding on November 28, 2024 and sell it today you would lose (4.00) from holding Eve Holding or give up 0.95% of portfolio value over 90 days.

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

Momentus  vs.  Eve Holding

Momentus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Momentus 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 basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Eve Holding

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eve Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Eve Holding is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Momentus and Eve Holding

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

The idea behind Momentus and Eve Holding 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.