Correlation Between Evolution Mining and Hisense Home
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and Hisense Home 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 Hisense Home 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 Hisense Home Appliances, you can compare the effects of market volatilities on Evolution Mining and Hisense Home 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 Hisense Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and Hisense Home.
Diversification Opportunities for Evolution Mining and Hisense Home
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Evolution and Hisense is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining Limited and Hisense Home Appliances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hisense Home Appliances 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 Hisense Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hisense Home Appliances has no effect on the direction of Evolution Mining i.e., Evolution Mining and Hisense Home go up and down completely randomly.
Pair Corralation between Evolution Mining and Hisense Home
Assuming the 90 days horizon Evolution Mining is expected to generate 1.29 times less return on investment than Hisense Home. But when comparing it to its historical volatility, Evolution Mining Limited is 2.21 times less risky than Hisense Home. It trades about 0.13 of its potential returns per unit of risk. Hisense Home Appliances is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 232.00 in Hisense Home Appliances on August 25, 2024 and sell it today you would earn a total of 44.00 from holding Hisense Home Appliances or generate 18.97% 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. Hisense Home Appliances
Performance |
| Timeline |
| Evolution Mining |
| Hisense Home Appliances |
Evolution Mining and Hisense Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and Hisense Home
The main advantage of trading using opposite Evolution Mining and Hisense Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, Hisense Home 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 Hisense Home will offset losses from the drop in Hisense Home's long position.| Evolution Mining vs. Franco Nevada | Evolution Mining vs. Agnico Eagle Mines | Evolution Mining vs. Superior Plus Corp | Evolution Mining vs. NMI Holdings |
| Hisense Home vs. Wyndham Hotels Resorts | Hisense Home vs. Evolution Mining Limited | Hisense Home vs. Jacquet Metal Service | Hisense Home vs. Park Hotels Resorts |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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