Correlation Between Steven Madden and Evolution Mining
Can any of the company-specific risk be diversified away by investing in both Steven Madden 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 Steven Madden and Evolution Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steven Madden and Evolution Mining, you can compare the effects of market volatilities on Steven Madden 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 Steven Madden with a short position of Evolution Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steven Madden and Evolution Mining.
Diversification Opportunities for Steven Madden and Evolution Mining
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Steven and Evolution is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Steven Madden and Evolution Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining and Steven Madden 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 Steven Madden 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 Steven Madden i.e., Steven Madden and Evolution Mining go up and down completely randomly.
Pair Corralation between Steven Madden and Evolution Mining
Given the investment horizon of 90 days Steven Madden is expected to generate 0.59 times more return on investment than Evolution Mining. However, Steven Madden is 1.7 times less risky than Evolution Mining. It trades about 0.04 of its potential returns per unit of risk. Evolution Mining is currently generating about 0.02 per unit of risk. If you would invest 4,497 in Steven Madden on September 1, 2024 and sell it today you would earn a total of 61.00 from holding Steven Madden or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steven Madden vs. Evolution Mining
Performance |
| Timeline |
| Steven Madden |
| Evolution Mining |
Steven Madden and Evolution Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steven Madden and Evolution Mining
The main advantage of trading using opposite Steven Madden and Evolution Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steven Madden 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.| Steven Madden vs. Deckers Outdoor | Steven Madden vs. On Holding | Steven Madden vs. Crocs Inc | Steven Madden vs. Designer Brands |
| Evolution Mining vs. Regis Resources | Evolution Mining vs. West African Resources | Evolution Mining vs. Allegiant Gold | Evolution Mining vs. Minaurum Gold |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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