Correlation Between Evolution Mining and NTG Nordic

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

Diversification Opportunities for Evolution Mining and NTG Nordic

-0.19
  Correlation Coefficient

Good diversification

The 3 months correlation between Evolution and NTG is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining Limited and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport 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 NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of Evolution Mining i.e., Evolution Mining and NTG Nordic go up and down completely randomly.

Pair Corralation between Evolution Mining and NTG Nordic

Assuming the 90 days horizon Evolution Mining Limited is expected to generate 1.13 times more return on investment than NTG Nordic. However, Evolution Mining is 1.13 times more volatile than NTG Nordic Transport. It trades about 0.08 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about -0.12 per unit of risk. If you would invest  267.00  in Evolution Mining Limited on September 20, 2024 and sell it today you would earn a total of  28.00  from holding Evolution Mining Limited or generate 10.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Evolution Mining Limited  vs.  NTG Nordic Transport

 Performance 
       Timeline  
Evolution Mining 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Mining Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Evolution Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.
NTG Nordic Transport 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days NTG Nordic Transport has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Evolution Mining and NTG Nordic Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Evolution Mining and NTG Nordic

The main advantage of trading using opposite Evolution Mining and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, NTG Nordic 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 NTG Nordic will offset losses from the drop in NTG Nordic's long position.
The idea behind Evolution Mining Limited and NTG Nordic Transport 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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