Correlation Between Evolution and AECOM TECHNOLOGY

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

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

Diversification Opportunities for Evolution and AECOM TECHNOLOGY

-0.17

Correlation Coefficient

Evolution  AECOM TECHNOLOGY

Good diversification

The 3 months correlation between Evolution and AECOM is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Evolution AB and AECOM TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECOM TECHNOLOGY and Evolution 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 Evolution AB are associated (or correlated) with AECOM TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECOM TECHNOLOGY has no effect on the direction of Evolution i.e., Evolution and AECOM TECHNOLOGY go up and down completely randomly.

Pair Corralation between Evolution and AECOM TECHNOLOGY

Assuming the 90 days trading horizon Evolution is expected to generate 1.79 times less return on investment than AECOM TECHNOLOGY. In addition to that, Evolution is 2.42 times more volatile than AECOM TECHNOLOGY. It trades about 0.04 of its total potential returns per unit of risk. AECOM TECHNOLOGY is currently generating about 0.18 per unit of volatility. If you would invest  8,281  in AECOM TECHNOLOGY on April 24, 2025 and sell it today you would earn a total of  1,269  from holding AECOM TECHNOLOGY or generate 15.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Evolution AB  vs.  AECOM TECHNOLOGY

Evolution AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Evolution may actually be approaching a critical reversion point that can send shares even higher in August 2025.

AECOM TECHNOLOGY

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AECOM TECHNOLOGY are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, AECOM TECHNOLOGY exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evolution and AECOM TECHNOLOGY

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

The idea behind Evolution AB and AECOM 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.