Correlation Between Evolution Mining and Beneficient

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

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

Diversification Opportunities for Evolution Mining and Beneficient

-0.76

Correlation Coefficient

Evolution Mining  Beneficient

Pay attention - limited upside

The 3 months correlation between Evolution and Beneficient is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining and Beneficient Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beneficient Class 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 are associated (or correlated) with Beneficient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beneficient Class has no effect on the direction of Evolution Mining i.e., Evolution Mining and Beneficient go up and down completely randomly.

Pair Corralation between Evolution Mining and Beneficient

Assuming the 90 days horizon Evolution Mining is expected to generate 0.7 times more return on investment than Beneficient. However, Evolution Mining is 1.44 times less risky than Beneficient. It trades about 0.1 of its potential returns per unit of risk. Beneficient Class A is currently generating about -0.23 per unit of risk. If you would invest  322.00  in Evolution Mining on December 4, 2024 and sell it today you would earn a total of  71.00  from holding Evolution Mining or generate 22.05% return on investment over 90 days.

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

Evolution Mining  vs.  Beneficient Class A

Evolution Mining

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Mining are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Evolution Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Beneficient Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beneficient Class A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Evolution Mining and Beneficient

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

The idea behind Evolution Mining and Beneficient Class A 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.