Correlation Between Evolution Mining and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and LPKF Laser 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 LPKF Laser 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 LPKF Laser Electronics, you can compare the effects of market volatilities on Evolution Mining and LPKF Laser 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 LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and LPKF Laser.
Diversification Opportunities for Evolution Mining and LPKF Laser
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Evolution and LPKF is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining Limited and LPKF Laser Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPKF Laser Electronics 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 LPKF Laser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPKF Laser Electronics has no effect on the direction of Evolution Mining i.e., Evolution Mining and LPKF Laser go up and down completely randomly.
Pair Corralation between Evolution Mining and LPKF Laser
Assuming the 90 days horizon Evolution Mining Limited is expected to generate 1.87 times more return on investment than LPKF Laser. However, Evolution Mining is 1.87 times more volatile than LPKF Laser Electronics. It trades about -0.08 of its potential returns per unit of risk. LPKF Laser Electronics is currently generating about -0.2 per unit of risk. If you would invest 314.00 in Evolution Mining Limited on August 30, 2024 and sell it today you would lose (11.00) from holding Evolution Mining Limited or give up 3.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Mining Limited vs. LPKF Laser Electronics
Performance |
| Timeline |
| Evolution Mining |
| LPKF Laser Electronics |
Evolution Mining and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and LPKF Laser
The main advantage of trading using opposite Evolution Mining and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, LPKF Laser 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 LPKF Laser will offset losses from the drop in LPKF Laser's long position.| Evolution Mining vs. Franco Nevada | Evolution Mining vs. Wheaton Precious Metals | Evolution Mining vs. Superior Plus Corp | Evolution Mining vs. NMI Holdings |
| LPKF Laser vs. ABB | LPKF Laser vs. Superior Plus Corp | LPKF Laser vs. NMI Holdings | LPKF Laser vs. SIVERS SEMICONDUCTORS AB |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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