Correlation Between Evolution Mining and Gold Road
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and Gold Road 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 Gold Road into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution Mining and Gold Road Resources, you can compare the effects of market volatilities on Evolution Mining and Gold Road 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 Gold Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and Gold Road.
Diversification Opportunities for Evolution Mining and Gold Road
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Evolution and Gold is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining and Gold Road Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Road 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 Gold Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Road Resources has no effect on the direction of Evolution Mining i.e., Evolution Mining and Gold Road go up and down completely randomly.
Pair Corralation between Evolution Mining and Gold Road
Assuming the 90 days trading horizon Evolution Mining is expected to under-perform the Gold Road. But the stock apears to be less risky and, when comparing its historical volatility, Evolution Mining is 1.06 times less risky than Gold Road. The stock trades about -0.09 of its potential returns per unit of risk. The Gold Road Resources is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 191.00 in Gold Road Resources on August 29, 2024 and sell it today you would lose (5.00) from holding Gold Road Resources or give up 2.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Mining vs. Gold Road Resources
Performance |
| Timeline |
| Evolution Mining |
| Gold Road Resources |
Evolution Mining and Gold Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and Gold Road
The main advantage of trading using opposite Evolution Mining and Gold Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, Gold Road 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 Gold Road will offset losses from the drop in Gold Road's long position.| Evolution Mining vs. Credit Clear | Evolution Mining vs. Insignia Financial | Evolution Mining vs. Westpac Banking | Evolution Mining vs. Prime Financial Group |
| Gold Road vs. Northern Star Resources | Gold Road vs. Evolution Mining | Gold Road vs. Bluescope Steel | Gold Road vs. Sandfire Resources NL |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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