Correlation Between Evolve Active and NBI Unconstrained

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

By analyzing existing cross correlation between Evolve Active Global and NBI Unconstrained Fixed, you can compare the effects of market volatilities on Evolve Active and NBI Unconstrained 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 NBI Unconstrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolve Active and NBI Unconstrained.

Diversification Opportunities for Evolve Active and NBI Unconstrained

0.88

Correlation Coefficient

Evolve Active  NBI Unconstrained

Very poor diversification

The 3 months correlation between Evolve and NBI is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Evolve Active Global and NBI Unconstrained Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBI Unconstrained Fixed 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 Global are associated (or correlated) with NBI Unconstrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBI Unconstrained Fixed has no effect on the direction of Evolve Active i.e., Evolve Active and NBI Unconstrained go up and down completely randomly.

Pair Corralation between Evolve Active and NBI Unconstrained

Assuming the 90 days trading horizon Evolve Active is expected to generate 1.35 times less return on investment than NBI Unconstrained. But when comparing it to its historical volatility, Evolve Active Global is 1.7 times less risky than NBI Unconstrained. It trades about 0.08 of its potential returns per unit of risk. NBI Unconstrained Fixed is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,015  in NBI Unconstrained Fixed on April 5, 2025 and sell it today you would earn a total of  134.00  from holding NBI Unconstrained Fixed or generate 6.65% return on investment over 90 days.

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

Evolve Active Global  vs.  NBI Unconstrained Fixed

Evolve Active Global

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Evolve Active Global are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Evolve Active is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

NBI Unconstrained Fixed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NBI Unconstrained Fixed are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, NBI Unconstrained is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Evolve Active and NBI Unconstrained

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

The idea behind Evolve Active Global and NBI Unconstrained Fixed 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.