Correlation Between Evolution Mining and Akora Resources
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and Akora Resources 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 Akora Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution Mining and Akora Resources, you can compare the effects of market volatilities on Evolution Mining and Akora Resources 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 Akora Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and Akora Resources.
Diversification Opportunities for Evolution Mining and Akora Resources
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Evolution and Akora is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining and Akora Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akora Resources 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 Akora Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akora Resources has no effect on the direction of Evolution Mining i.e., Evolution Mining and Akora Resources go up and down completely randomly.
Pair Corralation between Evolution Mining and Akora Resources
Assuming the 90 days trading horizon Evolution Mining is expected to generate 0.41 times more return on investment than Akora Resources. However, Evolution Mining is 2.42 times less risky than Akora Resources. It trades about 0.12 of its potential returns per unit of risk. Akora Resources is currently generating about -0.01 per unit of risk. If you would invest 316.00 in Evolution Mining on September 1, 2024 and sell it today you would earn a total of 190.00 from holding Evolution Mining or generate 60.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Mining vs. Akora Resources
Performance |
| Timeline |
| Evolution Mining |
| Akora Resources |
Evolution Mining and Akora Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and Akora Resources
The main advantage of trading using opposite Evolution Mining and Akora Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, Akora Resources 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 Akora Resources will offset losses from the drop in Akora Resources' long position.| Evolution Mining vs. Macquarie Technology Group | Evolution Mining vs. Ainsworth Game Technology | Evolution Mining vs. Green Technology Metals | Evolution Mining vs. Computershare |
| Akora Resources vs. TPG Telecom | Akora Resources vs. Toys R Us | Akora Resources vs. Embark Education Group | Akora Resources vs. Westpac Banking |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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