Correlation Between Evolution Mining and National Health
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and National 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 National 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 National Health Investors, you can compare the effects of market volatilities on Evolution Mining and National 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 National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and National Health.
Diversification Opportunities for Evolution Mining and National Health
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evolution and National is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining Limited and National Health Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Investors 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 National Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Health Investors has no effect on the direction of Evolution Mining i.e., Evolution Mining and National Health go up and down completely randomly.
Pair Corralation between Evolution Mining and National Health
Assuming the 90 days horizon Evolution Mining Limited is expected to generate 1.68 times more return on investment than National Health. However, Evolution Mining is 1.68 times more volatile than National Health Investors. It trades about 0.05 of its potential returns per unit of risk. National Health Investors is currently generating about 0.06 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Mining Limited vs. National Health Investors
Performance |
| Timeline |
| Evolution Mining |
| National Health Investors |
Evolution Mining and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and National Health
The main advantage of trading using opposite Evolution Mining and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, National 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 National Health will offset losses from the drop in National 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 |
| National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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