Correlation Between Evolution Mining and LIFEWAY FOODS
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and LIFEWAY FOODS 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 LIFEWAY FOODS 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 LIFEWAY FOODS, you can compare the effects of market volatilities on Evolution Mining and LIFEWAY FOODS 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 LIFEWAY FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and LIFEWAY FOODS.
Diversification Opportunities for Evolution Mining and LIFEWAY FOODS
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Evolution and LIFEWAY is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining Limited and LIFEWAY FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFEWAY FOODS 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 LIFEWAY FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFEWAY FOODS has no effect on the direction of Evolution Mining i.e., Evolution Mining and LIFEWAY FOODS go up and down completely randomly.
Pair Corralation between Evolution Mining and LIFEWAY FOODS
Assuming the 90 days horizon Evolution Mining is expected to generate 2.69 times less return on investment than LIFEWAY FOODS. But when comparing it to its historical volatility, Evolution Mining Limited is 2.14 times less risky than LIFEWAY FOODS. It trades about 0.06 of its potential returns per unit of risk. LIFEWAY FOODS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 605.00 in LIFEWAY FOODS on September 3, 2024 and sell it today you would earn a total of 1,675 from holding LIFEWAY FOODS or generate 276.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Mining Limited vs. LIFEWAY FOODS
Performance |
| Timeline |
| Evolution Mining |
| LIFEWAY FOODS |
Evolution Mining and LIFEWAY FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and LIFEWAY FOODS
The main advantage of trading using opposite Evolution Mining and LIFEWAY FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, LIFEWAY FOODS 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 LIFEWAY FOODS will offset losses from the drop in LIFEWAY FOODS's long position.| Evolution Mining vs. ZIJIN MINH UNSPADR20 | Evolution Mining vs. Barrick Gold | Evolution Mining vs. Superior Plus Corp | Evolution Mining vs. NMI Holdings |
| LIFEWAY FOODS vs. TOTAL GABON | LIFEWAY FOODS vs. Walgreens Boots Alliance | LIFEWAY FOODS vs. Peak Resources Limited |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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