Correlation Between Evolution Mining and LendingTree

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

Diversification Opportunities for Evolution Mining and LendingTree

-0.2

Correlation Coefficient

Evolution Mining  LendingTree

Good diversification

The 3 months correlation between Evolution and LendingTree is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining Limited and LendingTree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LendingTree 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 LendingTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LendingTree has no effect on the direction of Evolution Mining i.e., Evolution Mining and LendingTree go up and down completely randomly.

Pair Corralation between Evolution Mining and LendingTree

Assuming the 90 days horizon Evolution Mining Limited is expected to generate 0.49 times more return on investment than LendingTree. However, Evolution Mining Limited is 2.03 times less risky than LendingTree. It trades about 0.01 of its potential returns per unit of risk. LendingTree is currently generating about -0.08 per unit of risk. If you would invest  288.00  in Evolution Mining Limited on September 30, 2024 and sell it today you would earn a total of  0.00  from holding Evolution Mining Limited or generate 0.0% return on investment over 90 days.

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

Evolution Mining Limited  vs.  LendingTree

Evolution Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evolution Mining Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Evolution Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

LendingTree

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LendingTree 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.

Pair Trading with Evolution Mining and LendingTree

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

The idea behind Evolution Mining Limited and LendingTree 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 Stocks Directory module to find actively traded stocks across global markets.