Correlation Between NBI Liquid and Evolve Active

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

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

Diversification Opportunities for NBI Liquid and Evolve Active

-0.65

Correlation Coefficient

NBI Liquid  Evolve Active

Excellent diversification

The 3 months correlation between NBI and Evolve is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding NBI Liquid Alternatives and Evolve Active Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolve Active Global and NBI Liquid 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 NBI Liquid Alternatives are associated (or correlated) with Evolve Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolve Active Global has no effect on the direction of NBI Liquid i.e., NBI Liquid and Evolve Active go up and down completely randomly.

Pair Corralation between NBI Liquid and Evolve Active

Assuming the 90 days trading horizon NBI Liquid Alternatives is expected to under-perform the Evolve Active. In addition to that, NBI Liquid is 2.94 times more volatile than Evolve Active Global. It trades about -0.01 of its total potential returns per unit of risk. Evolve Active Global is currently generating about 0.18 per unit of volatility. If you would invest  4,803  in Evolve Active Global on April 24, 2025 and sell it today you would earn a total of  102.00  from holding Evolve Active Global or generate 2.12% return on investment over 90 days.

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

NBI Liquid Alternatives  vs.  Evolve Active Global

NBI Liquid Alternatives

Risk-Adjusted Performance

Very Weak

Over the last 90 days NBI Liquid Alternatives has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, NBI Liquid is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Evolve Active Global

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evolve Active Global are ranked lower than 13 (%) 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.

Pair Trading with NBI Liquid and Evolve Active

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

The idea behind NBI Liquid Alternatives and Evolve Active Global 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.