Correlation Between Evolution Mining and Northern Star
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and Northern Star 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 Northern Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution Mining and Northern Star Resources, you can compare the effects of market volatilities on Evolution Mining and Northern Star 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 Northern Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and Northern Star.
Diversification Opportunities for Evolution Mining and Northern Star
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Evolution and Northern is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining and Northern Star Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Star 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 Northern Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Star Resources has no effect on the direction of Evolution Mining i.e., Evolution Mining and Northern Star go up and down completely randomly.
Pair Corralation between Evolution Mining and Northern Star
Assuming the 90 days trading horizon Evolution Mining is expected to generate 1.23 times less return on investment than Northern Star. In addition to that, Evolution Mining is 1.02 times more volatile than Northern Star Resources. It trades about 0.05 of its total potential returns per unit of risk. Northern Star Resources is currently generating about 0.07 per unit of volatility. If you would invest 1,623 in Northern Star Resources on August 28, 2024 and sell it today you would earn a total of 95.00 from holding Northern Star Resources or generate 5.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Mining vs. Northern Star Resources
Performance |
| Timeline |
| Evolution Mining |
| Northern Star Resources |
Evolution Mining and Northern Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and Northern Star
The main advantage of trading using opposite Evolution Mining and Northern Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, Northern Star 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 Northern Star will offset losses from the drop in Northern Star's long position.| Evolution Mining vs. Credit Clear | Evolution Mining vs. Insignia Financial | Evolution Mining vs. Westpac Banking | Evolution Mining vs. Prime Financial Group |
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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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