Correlation Between Evolution Mining and Performance Food

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

Diversification Opportunities for Evolution Mining and Performance Food

0.61

Correlation Coefficient

Evolution Mining  Performance Food

Poor diversification

The 3 months correlation between Evolution and Performance is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining Limited and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food 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 Performance Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Food has no effect on the direction of Evolution Mining i.e., Evolution Mining and Performance Food go up and down completely randomly.

Pair Corralation between Evolution Mining and Performance Food

Assuming the 90 days horizon Evolution Mining is expected to generate 1.39 times less return on investment than Performance Food. In addition to that, Evolution Mining is 1.61 times more volatile than Performance Food Group. It trades about 0.11 of its total potential returns per unit of risk. Performance Food Group is currently generating about 0.24 per unit of volatility. If you would invest  6,800  in Performance Food Group on September 17, 2024 and sell it today you would earn a total of  1,550  from holding Performance Food Group or generate 22.79% return on investment over 90 days.

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

Evolution Mining Limited  vs.  Performance Food Group

Evolution Mining

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Mining Limited are ranked lower than 8 (%) 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.

Performance Food

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Performance Food Group are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Performance Food unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evolution Mining and Performance Food

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

The idea behind Evolution Mining Limited and Performance Food Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.