Correlation Between Air New and Evolution Mining
Can any of the company-specific risk be diversified away by investing in both Air New and Evolution Mining 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 Air New and Evolution Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air New Zealand and Evolution Mining, you can compare the effects of market volatilities on Air New and Evolution Mining 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 Air New with a short position of Evolution Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air New and Evolution Mining.
Diversification Opportunities for Air New and Evolution Mining
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and Evolution is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Air New Zealand and Evolution Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining and Air New 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 Air New Zealand are associated (or correlated) with Evolution Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Mining has no effect on the direction of Air New i.e., Air New and Evolution Mining go up and down completely randomly.
Pair Corralation between Air New and Evolution Mining
Assuming the 90 days trading horizon Air New Zealand is expected to under-perform the Evolution Mining. But the stock apears to be less risky and, when comparing its historical volatility, Air New Zealand is 1.82 times less risky than Evolution Mining. The stock trades about -0.01 of its potential returns per unit of risk. The Evolution Mining is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 373.00 in Evolution Mining on September 14, 2024 and sell it today you would earn a total of 151.00 from holding Evolution Mining or generate 40.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air New Zealand vs. Evolution Mining
Performance |
| Timeline |
| Air New Zealand |
| Evolution Mining |
Air New and Evolution Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air New and Evolution Mining
The main advantage of trading using opposite Air New and Evolution Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air New position performs unexpectedly, Evolution Mining 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 Evolution Mining will offset losses from the drop in Evolution Mining's long position.| Air New vs. Ecofibre | Air New vs. iShares Global Healthcare | Air New vs. Adriatic Metals Plc | Air New vs. Australian Dairy Farms |
| Evolution Mining vs. Nine Entertainment Co | Evolution Mining vs. Data3 | Evolution Mining vs. BTC Health Limited | Evolution Mining vs. Kneomedia |
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.
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