Correlation Between GrafTech International and Evolution Mining
Can any of the company-specific risk be diversified away by investing in both GrafTech International and Evolution 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 GrafTech International and Evolution Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GrafTech International and Evolution Mining Limited, you can compare the effects of market volatilities on GrafTech International and Evolution 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 GrafTech International with a short position of Evolution Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of GrafTech International and Evolution Mining.
Diversification Opportunities for GrafTech International and Evolution Mining
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GrafTech and Evolution is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding GrafTech International and Evolution Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining and GrafTech International 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 GrafTech International are associated (or correlated) with Evolution Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Mining has no effect on the direction of GrafTech International i.e., GrafTech International and Evolution Mining go up and down completely randomly.
Pair Corralation between GrafTech International and Evolution Mining
Assuming the 90 days horizon GrafTech International is expected to under-perform the Evolution Mining. In addition to that, GrafTech International is 2.32 times more volatile than Evolution Mining Limited. It trades about -0.21 of its total potential returns per unit of risk. Evolution Mining Limited is currently generating about -0.11 per unit of volatility. If you would invest 303.00 in Evolution Mining Limited on September 24, 2024 and sell it today you would lose (17.00) from holding Evolution Mining Limited or give up 5.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GrafTech International vs. Evolution Mining Limited
Performance |
| Timeline |
| GrafTech International |
| Evolution Mining |
GrafTech International and Evolution Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GrafTech International and Evolution Mining
The main advantage of trading using opposite GrafTech International and Evolution Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GrafTech International position performs unexpectedly, Evolution 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 Evolution Mining will offset losses from the drop in Evolution Mining's long position.| GrafTech International vs. Evolution Mining Limited | GrafTech International vs. American Airlines Group | GrafTech International vs. Clean Energy Fuels | GrafTech International vs. ALERION CLEANPOWER |
| Evolution Mining vs. Waste Management | Evolution Mining vs. SALESFORCE INC CDR | Evolution Mining vs. CARSALESCOM | Evolution Mining vs. Gruppo Mutuionline SpA |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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