Correlation Between Aspire Mining and Evolution Mining

Can any of the company-specific risk be diversified away by investing in both Aspire Mining and Evolution Mining 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 Aspire Mining and Evolution Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aspire Mining and Evolution Mining, you can compare the effects of market volatilities on Aspire Mining and Evolution Mining 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 Aspire Mining with a short position of Evolution Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspire Mining and Evolution Mining.

Diversification Opportunities for Aspire Mining and Evolution Mining

-0.29

Correlation Coefficient

Aspire Mining  Evolution Mining

Very good diversification

The 3 months correlation between Aspire and Evolution is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Aspire Mining and Evolution Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining and Aspire 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 Aspire Mining are associated (or correlated) with Evolution Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Mining has no effect on the direction of Aspire Mining i.e., Aspire Mining and Evolution Mining go up and down completely randomly.

Pair Corralation between Aspire Mining and Evolution Mining

Assuming the 90 days trading horizon Aspire Mining is expected to generate 2.14 times less return on investment than Evolution Mining. In addition to that, Aspire Mining is 3.39 times more volatile than Evolution Mining. It trades about 0.05 of its total potential returns per unit of risk. Evolution Mining is currently generating about 0.35 per unit of volatility. If you would invest  481.00  in Evolution Mining on December 30, 2024 and sell it today you would earn a total of  239.00  from holding Evolution Mining or generate 49.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aspire Mining  vs.  Evolution Mining

Aspire Mining

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aspire Mining are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Aspire Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.

Evolution Mining

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Mining are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Evolution Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aspire Mining and Evolution Mining

The main advantage of trading using opposite Aspire Mining and Evolution Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspire Mining position performs unexpectedly, Evolution Mining 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 Evolution Mining will offset losses from the drop in Evolution Mining's long position.

The idea behind Aspire Mining and Evolution Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.