Correlation Between Evolution and Thunderful Group

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

By analyzing existing cross correlation between Evolution AB and Thunderful Group AB, you can compare the effects of market volatilities on Evolution and Thunderful Group 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 with a short position of Thunderful Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution and Thunderful Group.

Diversification Opportunities for Evolution and Thunderful Group

0.59

Correlation Coefficient

Evolution  Thunderful Group

Very weak diversification

The 3 months correlation between Evolution and Thunderful is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Evolution AB and Thunderful Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunderful Group and Evolution 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 AB are associated (or correlated) with Thunderful Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunderful Group has no effect on the direction of Evolution i.e., Evolution and Thunderful Group go up and down completely randomly.

Pair Corralation between Evolution and Thunderful Group

Assuming the 90 days trading horizon Evolution AB is expected to generate 0.37 times more return on investment than Thunderful Group. However, Evolution AB is 2.68 times less risky than Thunderful Group. It trades about -0.02 of its potential returns per unit of risk. Thunderful Group AB is currently generating about -0.1 per unit of risk. If you would invest  109,114  in Evolution AB on September 26, 2024 and sell it today you would lose (26,874) from holding Evolution AB or give up 24.63% of portfolio value over 90 days.

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

Evolution AB  vs.  Thunderful Group AB

Evolution AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evolution AB 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 basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Thunderful Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thunderful Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Evolution and Thunderful Group

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

The idea behind Evolution AB and Thunderful Group AB 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.