Correlation Between Zumiez and Evolution Mining

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

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

Diversification Opportunities for Zumiez and Evolution Mining

0.12

Correlation Coefficient

Zumiez  Evolution Mining

Average diversification

The 3 months correlation between Zumiez and Evolution is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Zumiez Inc and Evolution Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining and Zumiez 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 Zumiez Inc are associated (or correlated) with Evolution Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Mining has no effect on the direction of Zumiez i.e., Zumiez and Evolution Mining go up and down completely randomly.

Pair Corralation between Zumiez and Evolution Mining

Given the investment horizon of 90 days Zumiez Inc is expected to under-perform the Evolution Mining. In addition to that, Zumiez is 1.15 times more volatile than Evolution Mining. It trades about -0.05 of its total potential returns per unit of risk. Evolution Mining is currently generating about -0.04 per unit of volatility. If you would invest  317.00  in Evolution Mining on September 24, 2024 and sell it today you would lose (32.00) from holding Evolution Mining or give up 10.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Zumiez Inc  vs.  Evolution Mining

Zumiez Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zumiez Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Evolution Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evolution Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Zumiez and Evolution Mining

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

The idea behind Zumiez Inc and Evolution Mining 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.