Correlation Between Evolution Mining and Credit Clear
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and Credit Clear 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 Credit Clear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution Mining and Credit Clear, you can compare the effects of market volatilities on Evolution Mining and Credit Clear 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 Credit Clear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and Credit Clear.
Diversification Opportunities for Evolution Mining and Credit Clear
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Evolution and Credit is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining and Credit Clear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Clear 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 Credit Clear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Clear has no effect on the direction of Evolution Mining i.e., Evolution Mining and Credit Clear go up and down completely randomly.
Pair Corralation between Evolution Mining and Credit Clear
Assuming the 90 days trading horizon Evolution Mining is expected to under-perform the Credit Clear. But the stock apears to be less risky and, when comparing its historical volatility, Evolution Mining is 1.5 times less risky than Credit Clear. The stock trades about -0.05 of its potential returns per unit of risk. The Credit Clear is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Credit Clear on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Credit Clear or generate 9.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Mining vs. Credit Clear
Performance |
| Timeline |
| Evolution Mining |
| Credit Clear |
Evolution Mining and Credit Clear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and Credit Clear
The main advantage of trading using opposite Evolution Mining and Credit Clear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, Credit Clear 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 Credit Clear will offset losses from the drop in Credit Clear's long position.| Evolution Mining vs. Credit Clear | Evolution Mining vs. Insignia Financial | Evolution Mining vs. Westpac Banking | Evolution Mining vs. Prime Financial Group |
| Credit Clear vs. Westpac Banking | Credit Clear vs. Ecofibre | Credit Clear vs. iShares Global Healthcare | Credit Clear vs. Adriatic Metals Plc |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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