Correlation Between Evolution Mining and Lockheed Martin
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and Lockheed Martin 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 Lockheed Martin 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 Lockheed Martin, you can compare the effects of market volatilities on Evolution Mining and Lockheed Martin 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 Lockheed Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and Lockheed Martin.
Diversification Opportunities for Evolution Mining and Lockheed Martin
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Evolution and Lockheed is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining Limited and Lockheed Martin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lockheed Martin 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 Lockheed Martin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lockheed Martin has no effect on the direction of Evolution Mining i.e., Evolution Mining and Lockheed Martin go up and down completely randomly.
Pair Corralation between Evolution Mining and Lockheed Martin
Assuming the 90 days horizon Evolution Mining Limited is expected to generate 2.14 times more return on investment than Lockheed Martin. However, Evolution Mining is 2.14 times more volatile than Lockheed Martin. It trades about 0.05 of its potential returns per unit of risk. Lockheed Martin is currently generating about 0.05 per unit of risk. If you would invest 212.00 in Evolution Mining Limited on September 12, 2024 and sell it today you would earn a total of 94.00 from holding Evolution Mining Limited or generate 44.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Mining Limited vs. Lockheed Martin
Performance |
| Timeline |
| Evolution Mining |
| Lockheed Martin |
Evolution Mining and Lockheed Martin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and Lockheed Martin
The main advantage of trading using opposite Evolution Mining and Lockheed Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, Lockheed Martin 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 Lockheed Martin will offset losses from the drop in Lockheed Martin's long position.| Evolution Mining vs. Franco Nevada | Evolution Mining vs. Superior Plus Corp | Evolution Mining vs. SIVERS SEMICONDUCTORS AB | Evolution Mining vs. Norsk Hydro ASA |
| Lockheed Martin vs. Haier Smart Home | Lockheed Martin vs. Taylor Morrison Home | Lockheed Martin vs. UNITED RENTALS | Lockheed Martin vs. Alfa Financial Software |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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