Correlation Between 50249AAH6 and Evolution Mining

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

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

Diversification Opportunities for 50249AAH6 and Evolution Mining

0.44

Correlation Coefficient

50249AAH6  Evolution Mining

Very weak diversification

The 3 months correlation between 50249AAH6 and Evolution is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding LYB INTERNATIONAL FINANCE and Evolution Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining and 50249AAH6 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 LYB INTERNATIONAL FINANCE 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 50249AAH6 i.e., 50249AAH6 and Evolution Mining go up and down completely randomly.

Pair Corralation between 50249AAH6 and Evolution Mining

Assuming the 90 days trading horizon 50249AAH6 is expected to generate 48.49 times less return on investment than Evolution Mining. But when comparing it to its historical volatility, LYB INTERNATIONAL FINANCE is 6.65 times less risky than Evolution Mining. It trades about 0.02 of its potential returns per unit of risk. Evolution Mining is currently generating about 0.18 of returns per unit of risk over similar time horizon. 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

LYB INTERNATIONAL FINANCE  vs.  Evolution Mining

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.

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.

Pair Trading with 50249AAH6 and Evolution Mining

The main advantage of trading using opposite 50249AAH6 and Evolution Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 50249AAH6 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 LYB INTERNATIONAL FINANCE 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.