Correlation Between Evolution Mining and Humatech

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

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

Diversification Opportunities for Evolution Mining and Humatech

-0.03

Correlation Coefficient

Evolution Mining  Humatech

Good diversification

The 3 months correlation between Evolution and Humatech is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining and Humatech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humatech 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 Humatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humatech has no effect on the direction of Evolution Mining i.e., Evolution Mining and Humatech go up and down completely randomly.

Pair Corralation between Evolution Mining and Humatech

Assuming the 90 days horizon Evolution Mining is expected to generate 81.25 times less return on investment than Humatech. But when comparing it to its historical volatility, Evolution Mining is 32.47 times less risky than Humatech. It trades about 0.05 of its potential returns per unit of risk. Humatech is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.14  in Humatech on October 7, 2024 and sell it today you would earn a total of  0.04  from holding Humatech or generate 28.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.8%
Values	Daily Returns

Evolution Mining  vs.  Humatech

Evolution Mining

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Mining are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Evolution Mining may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Humatech

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Humatech are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent primary indicators, Humatech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evolution Mining and Humatech

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

The idea behind Evolution Mining and Humatech 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.