Correlation Between Evolution Mining and Maple Gold

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

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

Diversification Opportunities for Evolution Mining and Maple Gold

0.35

Correlation Coefficient

Evolution Mining  Maple Gold

Weak diversification

The 3 months correlation between Evolution and Maple is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining and Maple Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Gold Mines 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 Maple Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Gold Mines has no effect on the direction of Evolution Mining i.e., Evolution Mining and Maple Gold go up and down completely randomly.

Pair Corralation between Evolution Mining and Maple Gold

Assuming the 90 days horizon Evolution Mining is expected to under-perform the Maple Gold. But the pink sheet apears to be less risky and, when comparing its historical volatility, Evolution Mining is 1.9 times less risky than Maple Gold. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Maple Gold Mines is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Maple Gold Mines on October 9, 2024 and sell it today you would lose (0.10) from holding Maple Gold Mines or give up 2.5% of portfolio value over 90 days.

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

Evolution Mining  vs.  Maple Gold Mines

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.

Maple Gold Mines

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Evolution Mining and Maple Gold

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

The idea behind Evolution Mining and Maple Gold Mines 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.