Correlation Between HITACHI CONSTRMACHADR/2 and Evolution Mining

Can any of the company-specific risk be diversified away by investing in both HITACHI CONSTRMACHADR/2 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 HITACHI CONSTRMACHADR/2 and Evolution Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HITACHI STRMACHADR2 and Evolution Mining Limited, you can compare the effects of market volatilities on HITACHI CONSTRMACHADR/2 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 HITACHI CONSTRMACHADR/2 with a short position of Evolution Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of HITACHI CONSTRMACHADR/2 and Evolution Mining.

Diversification Opportunities for HITACHI CONSTRMACHADR/2 and Evolution Mining

0.7

Correlation Coefficient

HITACHI CONSTRMACHADR/2  Evolution Mining

Poor diversification

The 3 months correlation between HITACHI and Evolution is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding HITACHI STRMACHADR2 and Evolution Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining and HITACHI CONSTRMACHADR/2 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 HITACHI STRMACHADR2 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 HITACHI CONSTRMACHADR/2 i.e., HITACHI CONSTRMACHADR/2 and Evolution Mining go up and down completely randomly.

Pair Corralation between HITACHI CONSTRMACHADR/2 and Evolution Mining

Assuming the 90 days trading horizon HITACHI STRMACHADR2 is expected to generate 0.62 times more return on investment than Evolution Mining. However, HITACHI STRMACHADR2 is 1.62 times less risky than Evolution Mining. It trades about 0.07 of its potential returns per unit of risk. Evolution Mining Limited is currently generating about -0.03 per unit of risk. If you would invest  4,880  in HITACHI STRMACHADR2 on April 24, 2025 and sell it today you would earn a total of  370.00  from holding HITACHI STRMACHADR2 or generate 7.58% return on investment over 90 days.

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

HITACHI STRMACHADR2  vs.  Evolution Mining Limited

HITACHI CONSTRMACHADR/2

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HITACHI STRMACHADR2 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady primary indicators, HITACHI CONSTRMACHADR/2 may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Evolution Mining

Risk-Adjusted Performance

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.

Pair Trading with HITACHI CONSTRMACHADR/2 and Evolution Mining

The main advantage of trading using opposite HITACHI CONSTRMACHADR/2 and Evolution Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HITACHI CONSTRMACHADR/2 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 HITACHI STRMACHADR2 and Evolution Mining Limited 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.