Correlation Between Evolution Mining and Itech Minerals

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

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

Diversification Opportunities for Evolution Mining and Itech Minerals

0.11

Correlation Coefficient

Evolution Mining  Itech Minerals

Average diversification

The 3 months correlation between Evolution and Itech is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining and Itech Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itech Minerals 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 Itech Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itech Minerals has no effect on the direction of Evolution Mining i.e., Evolution Mining and Itech Minerals go up and down completely randomly.

Pair Corralation between Evolution Mining and Itech Minerals

Assuming the 90 days trading horizon Evolution Mining is expected to generate 1.15 times less return on investment than Itech Minerals. But when comparing it to its historical volatility, Evolution Mining is 4.47 times less risky than Itech Minerals. It trades about 0.65 of its potential returns per unit of risk. Itech Minerals is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  5.00  in Itech Minerals on October 23, 2024 and sell it today you would earn a total of  0.70  from holding Itech Minerals or generate 14.0% return on investment over 90 days.

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

Evolution Mining  vs.  Itech Minerals

Evolution Mining

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Mining are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Evolution Mining is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Itech Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Itech Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Evolution Mining and Itech Minerals

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

The idea behind Evolution Mining and Itech Minerals 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..