Correlation Between Evolution Mining and Highway Holdings
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and Highway Holdings 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 Highway Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution Mining and Highway Holdings Limited, you can compare the effects of market volatilities on Evolution Mining and Highway Holdings 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 Highway Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and Highway Holdings.
Diversification Opportunities for Evolution Mining and Highway Holdings
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Evolution and Highway is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining and Highway Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highway Holdings 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 Highway Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highway Holdings has no effect on the direction of Evolution Mining i.e., Evolution Mining and Highway Holdings go up and down completely randomly.
Pair Corralation between Evolution Mining and Highway Holdings
Assuming the 90 days horizon Evolution Mining is expected to generate 1.37 times more return on investment than Highway Holdings. However, Evolution Mining is 1.37 times more volatile than Highway Holdings Limited. It trades about 0.05 of its potential returns per unit of risk. Highway Holdings Limited is currently generating about 0.01 per unit of risk. If you would invest 201.00 in Evolution Mining on November 2, 2024 and sell it today you would earn a total of 145.00 from holding Evolution Mining or generate 72.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.76% |
| Values | Daily Returns |
Evolution Mining vs. Highway Holdings Limited
Performance |
| Timeline |
| Evolution Mining |
| Highway Holdings |
Evolution Mining and Highway Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and Highway Holdings
The main advantage of trading using opposite Evolution Mining and Highway Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, Highway Holdings 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 Highway Holdings will offset losses from the drop in Highway Holdings' long position.| Evolution Mining vs. Regis Resources | Evolution Mining vs. West African Resources | Evolution Mining vs. Allegiant Gold | Evolution Mining vs. Minaurum Gold |
| Highway Holdings vs. Deswell Industries | Highway Holdings vs. Euro Tech Holdings | Highway Holdings vs. China Natural Resources | Highway Holdings vs. Arts Way Manufacturing Co |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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