Correlation Between Evolution Mining and Sabra Health
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and Sabra Health 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 Sabra Health 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 Sabra Health Care, you can compare the effects of market volatilities on Evolution Mining and Sabra Health 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 Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and Sabra Health.
Diversification Opportunities for Evolution Mining and Sabra Health
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Evolution and Sabra is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining Limited and Sabra Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabra Health Care 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 Sabra Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabra Health Care has no effect on the direction of Evolution Mining i.e., Evolution Mining and Sabra Health go up and down completely randomly.
Pair Corralation between Evolution Mining and Sabra Health
Assuming the 90 days horizon Evolution Mining Limited is expected to generate 1.6 times more return on investment than Sabra Health. However, Evolution Mining is 1.6 times more volatile than Sabra Health Care. It trades about 0.05 of its potential returns per unit of risk. Sabra Health Care is currently generating about 0.08 per unit of risk. If you would invest 185.00 in Evolution Mining Limited on August 30, 2024 and sell it today you would earn a total of 118.00 from holding Evolution Mining Limited or generate 63.78% 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. Sabra Health Care
Performance |
| Timeline |
| Evolution Mining |
| Sabra Health Care |
Evolution Mining and Sabra Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and Sabra Health
The main advantage of trading using opposite Evolution Mining and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, Sabra Health 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 Sabra Health will offset losses from the drop in Sabra Health'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 |
| Sabra Health vs. Superior Plus Corp | Sabra Health vs. NMI Holdings | Sabra Health vs. SIVERS SEMICONDUCTORS AB | Sabra Health vs. Talanx AG |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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