Correlation Between Evolution and Prosus NV

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

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

Diversification Opportunities for Evolution and Prosus NV

-0.09

Correlation Coefficient

Evolution  Prosus NV

Good diversification

The 3 months correlation between Evolution and Prosus is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Evolution AB and Prosus NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosus NV and Evolution 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 AB are associated (or correlated) with Prosus NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosus NV has no effect on the direction of Evolution i.e., Evolution and Prosus NV go up and down completely randomly.

Pair Corralation between Evolution and Prosus NV

Assuming the 90 days trading horizon Evolution is expected to generate 2.15 times less return on investment than Prosus NV. In addition to that, Evolution is 1.92 times more volatile than Prosus NV. It trades about 0.05 of its total potential returns per unit of risk. Prosus NV is currently generating about 0.22 per unit of volatility. If you would invest  3,992  in Prosus NV on April 23, 2025 and sell it today you would earn a total of  992.00  from holding Prosus NV or generate 24.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Evolution AB  vs.  Prosus NV

Evolution AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Evolution may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Prosus NV

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Prosus NV are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Prosus NV unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evolution and Prosus NV

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

The idea behind Evolution AB and Prosus NV 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.