Correlation Between Evolution Mining and Hercules Capital
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and Hercules Capital 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 Hercules Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution Mining Limited and Hercules Capital, you can compare the effects of market volatilities on Evolution Mining and Hercules Capital 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 Hercules Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and Hercules Capital.
Diversification Opportunities for Evolution Mining and Hercules Capital
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Evolution and Hercules is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining Limited and Hercules Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hercules Capital 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 Limited are associated (or correlated) with Hercules Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hercules Capital has no effect on the direction of Evolution Mining i.e., Evolution Mining and Hercules Capital go up and down completely randomly.
Pair Corralation between Evolution Mining and Hercules Capital
Assuming the 90 days horizon Evolution Mining is expected to generate 1.1 times less return on investment than Hercules Capital. In addition to that, Evolution Mining is 1.47 times more volatile than Hercules Capital. It trades about 0.04 of its total potential returns per unit of risk. Hercules Capital is currently generating about 0.07 per unit of volatility. If you would invest 1,053 in Hercules Capital on September 26, 2024 and sell it today you would earn a total of 781.00 from holding Hercules Capital or generate 74.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Mining Limited vs. Hercules Capital
Performance |
| Timeline |
| Evolution Mining |
| Hercules Capital |
Evolution Mining and Hercules Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and Hercules Capital
The main advantage of trading using opposite Evolution Mining and Hercules Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, Hercules Capital 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 Hercules Capital will offset losses from the drop in Hercules Capital's long position.| Evolution Mining vs. ZIJIN MINH UNSPADR20 | Evolution Mining vs. Barrick Gold | Evolution Mining vs. Franco Nevada | Evolution Mining vs. Agnico Eagle Mines |
| Hercules Capital vs. Harmony Gold Mining | Hercules Capital vs. Evolution Mining Limited | Hercules Capital vs. ORMAT TECHNOLOGIES | Hercules Capital vs. GRIFFIN MINING LTD |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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