Correlation Between Evolution Mining and UET United

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

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

Diversification Opportunities for Evolution Mining and UET United

0.01

Correlation Coefficient

Evolution Mining  UET United

Significant diversification

The 3 months correlation between Evolution and UET is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining Limited and UET United Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UET United Electronic 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 Limited are associated (or correlated) with UET United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UET United Electronic has no effect on the direction of Evolution Mining i.e., Evolution Mining and UET United go up and down completely randomly.

Pair Corralation between Evolution Mining and UET United

Assuming the 90 days horizon Evolution Mining Limited is expected to under-perform the UET United. But the stock apears to be less risky and, when comparing its historical volatility, Evolution Mining Limited is 2.39 times less risky than UET United. The stock trades about -0.05 of its potential returns per unit of risk. The UET United Electronic is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  81.00  in UET United Electronic on October 6, 2024 and sell it today you would earn a total of  9.00  from holding UET United Electronic or generate 11.11% return on investment over 90 days.

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

Evolution Mining Limited  vs.  UET United Electronic

Evolution Mining

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Mining Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Evolution Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

UET United Electronic

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in UET United Electronic are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, UET United may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Evolution Mining and UET United

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

The idea behind Evolution Mining Limited and UET United Electronic 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.