Correlation Between Evolution Mining and Hon Hai
Can any of the company-specific risk be diversified away by investing in both Evolution Mining and Hon Hai 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 Hon Hai 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 Hon Hai Precision, you can compare the effects of market volatilities on Evolution Mining and Hon Hai 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 Hon Hai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and Hon Hai.
Diversification Opportunities for Evolution Mining and Hon Hai
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evolution and Hon is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining Limited and Hon Hai Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hon Hai Precision 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 Hon Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hon Hai Precision has no effect on the direction of Evolution Mining i.e., Evolution Mining and Hon Hai go up and down completely randomly.
Pair Corralation between Evolution Mining and Hon Hai
Assuming the 90 days horizon Evolution Mining Limited is expected to under-perform the Hon Hai. But the stock apears to be less risky and, when comparing its historical volatility, Evolution Mining Limited is 1.3 times less risky than Hon Hai. The stock trades about -0.02 of its potential returns per unit of risk. The Hon Hai Precision is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 741.00 in Hon Hai Precision on April 23, 2025 and sell it today you would earn a total of 204.00 from holding Hon Hai Precision or generate 27.53% 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. Hon Hai Precision
Performance |
Timeline |
Evolution Mining |
Hon Hai Precision |
Evolution Mining and Hon Hai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Evolution Mining and Hon Hai
The main advantage of trading using opposite Evolution Mining and Hon Hai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining position performs unexpectedly, Hon Hai 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 Hon Hai will offset losses from the drop in Hon Hai's long position.Evolution Mining vs. ZIJIN MINH UNSPADR20 | Evolution Mining vs. Newmont | Evolution Mining vs. Agnico Eagle Mines | Evolution Mining vs. Wheaton Precious Metals |
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Check out your portfolio center.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.
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