Correlation Between Evolution Mining and Canon Marketing

Can any of the company-specific risk be diversified away by investing in both Evolution Mining and Canon Marketing 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 Canon Marketing 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 Canon Marketing Japan, you can compare the effects of market volatilities on Evolution Mining and Canon Marketing 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 Canon Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and Canon Marketing.

Diversification Opportunities for Evolution Mining and Canon Marketing

0.57

Correlation Coefficient

Evolution Mining  Canon Marketing

Very weak diversification

The 3 months correlation between Evolution and Canon is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining Limited and Canon Marketing Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Marketing Japan 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 Canon Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Marketing Japan has no effect on the direction of Evolution Mining i.e., Evolution Mining and Canon Marketing go up and down completely randomly.

Pair Corralation between Evolution Mining and Canon Marketing

Assuming the 90 days horizon Evolution Mining Limited is expected to generate 2.94 times more return on investment than Canon Marketing. However, Evolution Mining is 2.94 times more volatile than Canon Marketing Japan. It trades about 0.12 of its potential returns per unit of risk. Canon Marketing Japan is currently generating about 0.12 per unit of risk. If you would invest  337.00  in Evolution Mining Limited on December 2, 2024 and sell it today you would earn a total of  23.00  from holding Evolution Mining Limited or generate 6.82% return on investment over 90 days.

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

Evolution Mining Limited  vs.  Canon Marketing Japan

Evolution Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Mining Limited are ranked lower than 11 (%) 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.

Canon Marketing Japan

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Canon Marketing Japan are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Canon Marketing may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Evolution Mining and Canon Marketing

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

The idea behind Evolution Mining Limited and Canon Marketing Japan 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.