Correlation Between Evolution Mining and 50249AAH6

Can any of the company-specific risk be diversified away by investing in both Evolution Mining and 50249AAH6 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 50249AAH6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Evolution Mining and LYB INTERNATIONAL FINANCE, you can compare the effects of market volatilities on Evolution Mining and 50249AAH6 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 50249AAH6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and 50249AAH6.

Diversification Opportunities for Evolution Mining and 50249AAH6

0.58

Correlation Coefficient

Evolution Mining  50249AAH6

Very weak diversification

The 3 months correlation between Evolution and 50249AAH6 is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining and LYB INTERNATIONAL FINANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYB INTERNATIONAL FINANCE 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 50249AAH6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYB INTERNATIONAL FINANCE has no effect on the direction of Evolution Mining i.e., Evolution Mining and 50249AAH6 go up and down completely randomly.

Pair Corralation between Evolution Mining and 50249AAH6

Assuming the 90 days horizon Evolution Mining is expected to generate 6.65 times more return on investment than 50249AAH6. However, Evolution Mining is 6.65 times more volatile than LYB INTERNATIONAL FINANCE. It trades about 0.18 of its potential returns per unit of risk. LYB INTERNATIONAL FINANCE is currently generating about 0.02 per unit of risk. If you would invest  303.00  in Evolution Mining on December 26, 2024 and sell it today you would earn a total of  142.00  from holding Evolution Mining or generate 46.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.0%
Values	Daily Returns

Evolution Mining  vs.  LYB INTERNATIONAL FINANCE

Evolution Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Mining are ranked lower than 13 (%) 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.

LYB INTERNATIONAL FINANCE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LYB INTERNATIONAL FINANCE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 50249AAH6 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Evolution Mining and 50249AAH6

The main advantage of trading using opposite Evolution Mining and 50249AAH6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, 50249AAH6 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 50249AAH6 will offset losses from the drop in 50249AAH6's long position.

The idea behind Evolution Mining and LYB INTERNATIONAL FINANCE 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.

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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.