Correlation Between Evolution Mining and Bayer AG
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and Bayer AG 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 Bayer AG 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 Bayer AG NA, you can compare the effects of market volatilities on Evolution Mining and Bayer AG 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 Bayer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and Bayer AG.
Diversification Opportunities for Evolution Mining and Bayer AG
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evolution and Bayer is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining Limited and Bayer AG NA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayer AG NA 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 Bayer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayer AG NA has no effect on the direction of Evolution Mining i.e., Evolution Mining and Bayer AG go up and down completely randomly.
Pair Corralation between Evolution Mining and Bayer AG
Assuming the 90 days horizon Evolution Mining Limited is expected to generate 1.34 times more return on investment than Bayer AG. However, Evolution Mining is 1.34 times more volatile than Bayer AG NA. It trades about 0.06 of its potential returns per unit of risk. Bayer AG NA is currently generating about -0.04 per unit of risk. If you would invest 289.00 in Evolution Mining Limited on September 19, 2024 and sell it today you would earn a total of 7.00 from holding Evolution Mining Limited or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Evolution Mining Limited vs. Bayer AG NA
Performance |
| Timeline |
| Evolution Mining |
| Bayer AG NA |
Evolution Mining and Bayer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and Bayer AG
The main advantage of trading using opposite Evolution Mining and Bayer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, Bayer AG 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 Bayer AG will offset losses from the drop in Bayer AG's long position.| Evolution Mining vs. Superior Plus Corp | Evolution Mining vs. SIVERS SEMICONDUCTORS AB | Evolution Mining vs. Norsk Hydro ASA | Evolution Mining vs. Reliance Steel Aluminum |
| Bayer AG vs. Roche Holding Ltd | Bayer AG vs. ASTELLAS PHARMA UNSPADR | Bayer AG vs. Astellas Pharma | Bayer AG vs. CSPC PHARMACEUTGR ADR4 |
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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