Correlation Between Evolution Mining and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and Coca Cola 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 Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution Mining and The Coca Cola, you can compare the effects of market volatilities on Evolution Mining and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and Coca Cola.
Diversification Opportunities for Evolution Mining and Coca Cola
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evolution and Coca is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of Evolution Mining i.e., Evolution Mining and Coca Cola go up and down completely randomly.
Pair Corralation between Evolution Mining and Coca Cola
Assuming the 90 days horizon Evolution Mining is expected to generate 4.87 times more return on investment than Coca Cola. However, Evolution Mining is 4.87 times more volatile than The Coca Cola. It trades about 0.05 of its potential returns per unit of risk. The Coca Cola is currently generating about 0.04 per unit of risk. If you would invest 222.00 in Evolution Mining on September 4, 2024 and sell it today you would earn a total of 100.00 from holding Evolution Mining or generate 45.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.25% |
| Values | Daily Returns |
Evolution Mining vs. The Coca Cola
Performance |
| Timeline |
| Evolution Mining |
| Coca Cola |
Evolution Mining and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and Coca Cola
The main advantage of trading using opposite Evolution Mining and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.| Evolution Mining vs. Harmony Gold Mining | Evolution Mining vs. SPACE | Evolution Mining vs. T Rowe Price | Evolution Mining vs. Ampleforth |
| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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