Correlation Between Evolution Mining and Peel Mining
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and Peel Mining 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 Peel Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution Mining and Peel Mining, you can compare the effects of market volatilities on Evolution Mining and Peel Mining 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 Peel Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and Peel Mining.
Diversification Opportunities for Evolution Mining and Peel Mining
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Evolution and Peel is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining and Peel Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peel Mining 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 Peel Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peel Mining has no effect on the direction of Evolution Mining i.e., Evolution Mining and Peel Mining go up and down completely randomly.
Pair Corralation between Evolution Mining and Peel Mining
Assuming the 90 days trading horizon Evolution Mining is expected to generate 0.51 times more return on investment than Peel Mining. However, Evolution Mining is 1.95 times less risky than Peel Mining. It trades about 0.06 of its potential returns per unit of risk. Peel Mining is currently generating about 0.01 per unit of risk. If you would invest 281.00 in Evolution Mining on September 4, 2024 and sell it today you would earn a total of 205.00 from holding Evolution Mining or generate 72.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Mining vs. Peel Mining
Performance |
| Timeline |
| Evolution Mining |
| Peel Mining |
Evolution Mining and Peel Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and Peel Mining
The main advantage of trading using opposite Evolution Mining and Peel Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, Peel Mining 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 Peel Mining will offset losses from the drop in Peel Mining's long position.| Evolution Mining vs. Northern Star Resources | Evolution Mining vs. Bluescope Steel | Evolution Mining vs. Sandfire Resources NL | Evolution Mining vs. Aneka Tambang Tbk |
| Peel Mining vs. Northern Star Resources | Peel Mining vs. Evolution Mining | Peel Mining vs. Bluescope Steel | Peel Mining 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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