Correlation Between Evolution Mining and Aurubis AG

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

Diversification Opportunities for Evolution Mining and Aurubis AG

0.31

Correlation Coefficient

Evolution Mining  Aurubis AG

Weak diversification

The 3 months correlation between Evolution and Aurubis is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining Limited and Aurubis AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurubis AG 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 Aurubis AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurubis AG has no effect on the direction of Evolution Mining i.e., Evolution Mining and Aurubis AG go up and down completely randomly.

Pair Corralation between Evolution Mining and Aurubis AG

Assuming the 90 days horizon Evolution Mining Limited is expected to under-perform the Aurubis AG. But the stock apears to be less risky and, when comparing its historical volatility, Evolution Mining Limited is 1.08 times less risky than Aurubis AG. The stock trades about -0.12 of its potential returns per unit of risk. The Aurubis AG is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  7,685  in Aurubis AG on September 23, 2024 and sell it today you would earn a total of  275.00  from holding Aurubis AG or generate 3.58% return on investment over 90 days.

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

Evolution Mining Limited  vs.  Aurubis AG

Evolution Mining

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Mining Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Evolution Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Aurubis AG

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aurubis AG are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Aurubis AG reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evolution Mining and Aurubis AG

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

The idea behind Evolution Mining Limited and Aurubis AG 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.