Correlation Between Evolution Mining and HomeToGo
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and HomeToGo 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 HomeToGo 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 HomeToGo SE, you can compare the effects of market volatilities on Evolution Mining and HomeToGo 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 HomeToGo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and HomeToGo.
Diversification Opportunities for Evolution Mining and HomeToGo
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Evolution and HomeToGo is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining Limited and HomeToGo SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeToGo SE 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 HomeToGo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeToGo SE has no effect on the direction of Evolution Mining i.e., Evolution Mining and HomeToGo go up and down completely randomly.
Pair Corralation between Evolution Mining and HomeToGo
Assuming the 90 days horizon Evolution Mining Limited is expected to generate 0.85 times more return on investment than HomeToGo. However, Evolution Mining Limited is 1.17 times less risky than HomeToGo. It trades about 0.16 of its potential returns per unit of risk. HomeToGo SE is currently generating about 0.11 per unit of risk. If you would invest 251.00 in Evolution Mining Limited on September 2, 2024 and sell it today you would earn a total of 64.00 from holding Evolution Mining Limited or generate 25.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Mining Limited vs. HomeToGo SE
Performance |
| Timeline |
| Evolution Mining |
| HomeToGo SE |
Evolution Mining and HomeToGo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and HomeToGo
The main advantage of trading using opposite Evolution Mining and HomeToGo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, HomeToGo 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 HomeToGo will offset losses from the drop in HomeToGo's long position.| Evolution Mining vs. ZIJIN MINH UNSPADR20 | Evolution Mining vs. Superior Plus Corp | Evolution Mining vs. NMI Holdings | Evolution Mining vs. Origin Agritech |
| HomeToGo vs. LG Display Co | HomeToGo vs. ANGLER GAMING PLC | HomeToGo vs. QINGCI GAMES INC | HomeToGo vs. GameStop Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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