Correlation Between First Asset and Evolve Global

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

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

Diversification Opportunities for First Asset and Evolve Global

0.89

Correlation Coefficient

First Asset  Evolve Global

Very poor diversification

The 3 months correlation between First and Evolve is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding First Asset Tech and Evolve Global Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolve Global Materials and First Asset 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 First Asset Tech are associated (or correlated) with Evolve Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolve Global Materials has no effect on the direction of First Asset i.e., First Asset and Evolve Global go up and down completely randomly.

Pair Corralation between First Asset and Evolve Global

Assuming the 90 days trading horizon First Asset Tech is expected to generate 1.26 times more return on investment than Evolve Global. However, First Asset is 1.26 times more volatile than Evolve Global Materials. It trades about 0.03 of its potential returns per unit of risk. Evolve Global Materials is currently generating about 0.0 per unit of risk. If you would invest  1,894  in First Asset Tech on April 22, 2025 and sell it today you would earn a total of  209.00  from holding First Asset Tech or generate 11.03% return on investment over 90 days.

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

First Asset Tech  vs.  Evolve Global Materials

First Asset Tech

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in First Asset Tech are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, First Asset displayed solid returns over the last few months and may actually be approaching a breakup point.

Evolve Global Materials

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evolve Global Materials are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Evolve Global may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with First Asset and Evolve Global

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

The idea behind First Asset Tech and Evolve Global Materials 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.