Correlation Between Evolution Mining and Hufvudstaden
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and Hufvudstaden 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 Hufvudstaden 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 Hufvudstaden AB, you can compare the effects of market volatilities on Evolution Mining and Hufvudstaden 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 Hufvudstaden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and Hufvudstaden.
Diversification Opportunities for Evolution Mining and Hufvudstaden
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Evolution and Hufvudstaden is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining Limited and Hufvudstaden AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hufvudstaden AB 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 Hufvudstaden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hufvudstaden AB has no effect on the direction of Evolution Mining i.e., Evolution Mining and Hufvudstaden go up and down completely randomly.
Pair Corralation between Evolution Mining and Hufvudstaden
Assuming the 90 days horizon Evolution Mining Limited is expected to generate 2.34 times more return on investment than Hufvudstaden. However, Evolution Mining is 2.34 times more volatile than Hufvudstaden AB. It trades about 0.15 of its potential returns per unit of risk. Hufvudstaden AB is currently generating about 0.07 per unit of risk. If you would invest 345.00 in Evolution Mining Limited on December 1, 2024 and sell it today you would earn a total of 30.00 from holding Evolution Mining Limited or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Evolution Mining Limited vs. Hufvudstaden AB
Performance |
| Timeline |
| Evolution Mining |
| Hufvudstaden AB |
Evolution Mining and Hufvudstaden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and Hufvudstaden
The main advantage of trading using opposite Evolution Mining and Hufvudstaden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, Hufvudstaden 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 Hufvudstaden will offset losses from the drop in Hufvudstaden's long position.| Evolution Mining vs. Endeavour Mining PLC | Evolution Mining vs. Fortescue Metals Group | Evolution Mining vs. De Grey Mining | Evolution Mining vs. Nippon Light Metal |
| Hufvudstaden vs. Infrastrutture Wireless Italiane | Hufvudstaden vs. SBA Communications Corp | Hufvudstaden vs. DeVry Education Group | Hufvudstaden vs. CITIC Telecom International |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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