Correlation Between Evolution Mining and OceanaGold
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and OceanaGold 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 OceanaGold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution Mining and OceanaGold, you can compare the effects of market volatilities on Evolution Mining and OceanaGold 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 OceanaGold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and OceanaGold.
Diversification Opportunities for Evolution Mining and OceanaGold
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Evolution and OceanaGold is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining and OceanaGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OceanaGold 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 OceanaGold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OceanaGold has no effect on the direction of Evolution Mining i.e., Evolution Mining and OceanaGold go up and down completely randomly.
Pair Corralation between Evolution Mining and OceanaGold
Assuming the 90 days horizon Evolution Mining is expected to under-perform the OceanaGold. In addition to that, Evolution Mining is 1.18 times more volatile than OceanaGold. It trades about -0.02 of its total potential returns per unit of risk. OceanaGold is currently generating about 0.22 per unit of volatility. If you would invest 279.00 in OceanaGold on September 5, 2024 and sell it today you would earn a total of 38.00 from holding OceanaGold or generate 13.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Evolution Mining vs. OceanaGold
Performance |
| Timeline |
| Evolution Mining |
| OceanaGold |
Evolution Mining and OceanaGold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and OceanaGold
The main advantage of trading using opposite Evolution Mining and OceanaGold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, OceanaGold 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 OceanaGold will offset losses from the drop in OceanaGold's long position.| Evolution Mining vs. Regis Resources | Evolution Mining vs. West African Resources | Evolution Mining vs. Allegiant Gold | Evolution Mining vs. Minaurum Gold |
| OceanaGold vs. Cache Exploration | OceanaGold vs. Evolution Mining | OceanaGold vs. Northern Star Resources | OceanaGold vs. Wesdome Gold Mines |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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