Correlation Between Evolution Mining and First Mining
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and First 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 Evolution Mining and First Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution Mining and First Mining Gold, you can compare the effects of market volatilities on Evolution Mining and First 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 Evolution Mining with a short position of First Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and First Mining.
Diversification Opportunities for Evolution Mining and First Mining
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Evolution and First is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining and First Mining Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Mining Gold and Evolution Mining 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 Mining are associated (or correlated) with First Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Mining Gold has no effect on the direction of Evolution Mining i.e., Evolution Mining and First Mining go up and down completely randomly.
Pair Corralation between Evolution Mining and First Mining
Assuming the 90 days horizon Evolution Mining is expected to generate 0.75 times more return on investment than First Mining. However, Evolution Mining is 1.34 times less risky than First Mining. It trades about 0.0 of its potential returns per unit of risk. First Mining Gold is currently generating about -0.04 per unit of risk. If you would invest 320.00 in Evolution Mining on September 2, 2024 and sell it today you would lose (4.00) from holding Evolution Mining or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Mining vs. First Mining Gold
Performance |
| Timeline |
| Evolution Mining |
| First Mining Gold |
Evolution Mining and First Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and First Mining
The main advantage of trading using opposite Evolution Mining and First Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, First 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 First Mining will offset losses from the drop in First Mining's long position.| Evolution Mining vs. Regis Resources | Evolution Mining vs. West African Resources | Evolution Mining vs. Allegiant Gold | Evolution Mining vs. Minaurum Gold |
| First Mining vs. South32 Limited | First Mining vs. NioCorp Developments Ltd | First Mining vs. HUMANA INC | First Mining vs. SCOR PK |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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