Correlation Between TRX Gold and Evolve Global

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

By analyzing existing cross correlation between TRX Gold Corp and Evolve Global Healthcare, you can compare the effects of market volatilities on TRX Gold and Evolve Global 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 TRX Gold with a short position of Evolve Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRX Gold and Evolve Global.

Diversification Opportunities for TRX Gold and Evolve Global

-0.41

Correlation Coefficient

TRX Gold  Evolve Global

Very good diversification

The 3 months correlation between TRX and Evolve is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding TRX Gold Corp and Evolve Global Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolve Global Healthcare and TRX Gold 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 TRX Gold Corp are associated (or correlated) with Evolve Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolve Global Healthcare has no effect on the direction of TRX Gold i.e., TRX Gold and Evolve Global go up and down completely randomly.

Pair Corralation between TRX Gold and Evolve Global

Assuming the 90 days trading horizon TRX Gold Corp is expected to generate 2.18 times more return on investment than Evolve Global. However, TRX Gold is 2.18 times more volatile than Evolve Global Healthcare. It trades about 0.07 of its potential returns per unit of risk. Evolve Global Healthcare is currently generating about 0.06 per unit of risk. If you would invest  4,218  in TRX Gold Corp on February 21, 2024 and sell it today you would earn a total of  159.00  from holding TRX Gold Corp or generate 3.77% return on investment over 90 days.

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

TRX Gold Corp  vs.  Evolve Global Healthcare

TRX Gold Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TRX Gold Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, TRX Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Evolve Global Healthcare

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evolve Global Healthcare are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Evolve Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with TRX Gold and Evolve Global

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

The idea behind TRX Gold Corp and Evolve Global Healthcare 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.