Correlation Between Evolution Mining and DRDGOLD Limited

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

By analyzing existing cross correlation between Evolution Mining and DRDGOLD Limited ADR, you can compare the effects of market volatilities on Evolution Mining and DRDGOLD Limited 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 DRDGOLD Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and DRDGOLD Limited.

Diversification Opportunities for Evolution Mining and DRDGOLD Limited

0.97

Correlation Coefficient

Evolution Mining  DRDGOLD Limited

Almost no diversification

The 3 months correlation between Evolution and DRDGOLD is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining and DRDGOLD Limited ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DRDGOLD Limited ADR 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 are associated (or correlated) with DRDGOLD Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DRDGOLD Limited ADR has no effect on the direction of Evolution Mining i.e., Evolution Mining and DRDGOLD Limited go up and down completely randomly.

Pair Corralation between Evolution Mining and DRDGOLD Limited

Assuming the 90 days horizon Evolution Mining is expected to generate 1.73 times less return on investment than DRDGOLD Limited. In addition to that, Evolution Mining is 1.14 times more volatile than DRDGOLD Limited ADR. It trades about 0.19 of its total potential returns per unit of risk. DRDGOLD Limited ADR is currently generating about 0.37 per unit of volatility. If you would invest  1,382  in DRDGOLD Limited ADR on July 6, 2025 and sell it today you would earn a total of  1,481  from holding DRDGOLD Limited ADR or generate 107.16% return on investment over 90 days.

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

Evolution Mining  vs.  DRDGOLD Limited ADR

Evolution Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Mining are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Evolution Mining reported solid returns over the last few months and may actually be approaching a breakup point.

DRDGOLD Limited ADR

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in DRDGOLD Limited ADR are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, DRDGOLD Limited exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evolution Mining and DRDGOLD Limited

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

The idea behind Evolution Mining and DRDGOLD Limited ADR 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.