Correlation Between Evolution Mining and Cooper Metals

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

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

Diversification Opportunities for Evolution Mining and Cooper Metals

-0.41

Correlation Coefficient

Evolution Mining  Cooper Metals

Very good diversification

The 3 months correlation between Evolution and Cooper is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining and Cooper Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Metals 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 are associated (or correlated) with Cooper Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Metals has no effect on the direction of Evolution Mining i.e., Evolution Mining and Cooper Metals go up and down completely randomly.

Pair Corralation between Evolution Mining and Cooper Metals

Assuming the 90 days trading horizon Evolution Mining is expected to generate 0.49 times more return on investment than Cooper Metals. However, Evolution Mining is 2.03 times less risky than Cooper Metals. It trades about 0.04 of its potential returns per unit of risk. Cooper Metals is currently generating about -0.1 per unit of risk. If you would invest  464.00  in Evolution Mining on September 26, 2024 and sell it today you would earn a total of  20.00  from holding Evolution Mining or generate 4.31% return on investment over 90 days.

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

Evolution Mining  vs.  Cooper Metals

Evolution Mining

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Mining are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Evolution Mining is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Cooper Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cooper Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Evolution Mining and Cooper Metals

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

The idea behind Evolution Mining and Cooper Metals 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.

Check out your portfolio center.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.