Correlation Between Evolution Mining and Bendigo
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and Bendigo 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 Bendigo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution Mining and Bendigo and Adelaide, you can compare the effects of market volatilities on Evolution Mining and Bendigo 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 Bendigo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and Bendigo.
Diversification Opportunities for Evolution Mining and Bendigo
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Evolution and Bendigo is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining and Bendigo and Adelaide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bendigo and Adelaide 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 Bendigo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bendigo and Adelaide has no effect on the direction of Evolution Mining i.e., Evolution Mining and Bendigo go up and down completely randomly.
Pair Corralation between Evolution Mining and Bendigo
Assuming the 90 days trading horizon Evolution Mining is expected to generate 8.48 times more return on investment than Bendigo. However, Evolution Mining is 8.48 times more volatile than Bendigo and Adelaide. It trades about 0.45 of its potential returns per unit of risk. Bendigo and Adelaide is currently generating about -0.12 per unit of risk. If you would invest 484.00 in Evolution Mining on November 3, 2024 and sell it today you would earn a total of 86.00 from holding Evolution Mining or generate 17.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Mining vs. Bendigo and Adelaide
Performance |
| Timeline |
| Evolution Mining |
| Bendigo and Adelaide |
Evolution Mining and Bendigo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and Bendigo
The main advantage of trading using opposite Evolution Mining and Bendigo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, Bendigo 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 Bendigo will offset losses from the drop in Bendigo's long position.| Evolution Mining vs. Centaurus Metals | Evolution Mining vs. Regal Funds Management | Evolution Mining vs. Sky Metals | Evolution Mining vs. Perseus Mining |
| Bendigo vs. Stelar Metals | Bendigo vs. Lykos Metals | Bendigo vs. MetalsGrove Mining | Bendigo vs. Dalaroo Metals |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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