Correlation Between Regis Resources and Evolution Mining

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

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

Diversification Opportunities for Regis Resources and Evolution Mining

0.86

Correlation Coefficient

Regis Resources  Evolution Mining

Very poor diversification

The 3 months correlation between Regis and Evolution is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Regis Resources and Evolution Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining and Regis Resources 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 Regis Resources are associated (or correlated) with Evolution Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Mining has no effect on the direction of Regis Resources i.e., Regis Resources and Evolution Mining go up and down completely randomly.

Pair Corralation between Regis Resources and Evolution Mining

Assuming the 90 days horizon Regis Resources is expected to generate 1.39 times more return on investment than Evolution Mining. However, Regis Resources is 1.39 times more volatile than Evolution Mining. It trades about 0.14 of its potential returns per unit of risk. Evolution Mining is currently generating about 0.19 per unit of risk. If you would invest  154.00  in Regis Resources on December 30, 2024 and sell it today you would earn a total of  77.00  from holding Regis Resources or generate 50.0% return on investment over 90 days.

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

Regis Resources  vs.  Evolution Mining

Regis Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Regis Resources are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Regis Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Evolution Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Mining are ranked lower than 14 (%) 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.

Pair Trading with Regis Resources and Evolution Mining

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

The idea behind Regis Resources and Evolution Mining 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.