Correlation Between De Grey and Evolution Mining
Can any of the company-specific risk be diversified away by investing in both De Grey 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 De Grey and Evolution Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between De Grey Mining and Evolution Mining, you can compare the effects of market volatilities on De Grey 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 De Grey with a short position of Evolution Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Evolution Mining.
Diversification Opportunities for De Grey and Evolution Mining
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between DEG and Evolution is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Evolution Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining and De Grey 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 De Grey Mining 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 De Grey i.e., De Grey and Evolution Mining go up and down completely randomly.
Pair Corralation between De Grey and Evolution Mining
Assuming the 90 days trading horizon De Grey Mining is expected to generate 0.95 times more return on investment than Evolution Mining. However, De Grey Mining is 1.06 times less risky than Evolution Mining. It trades about 0.08 of its potential returns per unit of risk. Evolution Mining is currently generating about 0.05 per unit of risk. If you would invest 139.00 in De Grey Mining on August 28, 2024 and sell it today you would earn a total of 9.00 from holding De Grey Mining or generate 6.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
De Grey Mining vs. Evolution Mining
Performance |
| Timeline |
| De Grey Mining |
| Evolution Mining |
De Grey and Evolution Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and Evolution Mining
The main advantage of trading using opposite De Grey and Evolution Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey 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.| De Grey vs. Aurelia Metals | De Grey vs. Austco Healthcare | De Grey vs. Health and Plant | De Grey vs. Alto Metals |
| Evolution Mining vs. Credit Clear | Evolution Mining vs. Insignia Financial | Evolution Mining vs. Westpac Banking | Evolution Mining vs. Prime Financial Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Global Correlations Find global opportunities by holding instruments from different markets |