Correlation Between Evolution Petroleum and Dmc Global

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

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

Diversification Opportunities for Evolution Petroleum and Dmc Global

-0.09

Correlation Coefficient

Evolution Petroleum  Dmc Global

Good diversification

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

Pair Corralation between Evolution Petroleum and Dmc Global

Considering the 90-day investment horizon Evolution Petroleum is expected to generate 0.49 times more return on investment than Dmc Global. However, Evolution Petroleum is 2.02 times less risky than Dmc Global. It trades about -0.04 of its potential returns per unit of risk. Dmc Global is currently generating about -0.04 per unit of risk. If you would invest  480.00  in Evolution Petroleum on July 23, 2025 and sell it today you would lose (29.00) from holding Evolution Petroleum or give up 6.04% of portfolio value over 90 days.

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

Evolution Petroleum  vs.  Dmc Global

Evolution Petroleum

Risk-Adjusted Performance

Weakest

Over the last 90 days Evolution Petroleum has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Evolution Petroleum is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Dmc Global

Risk-Adjusted Performance

Weakest

Over the last 90 days Dmc Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Evolution Petroleum and Dmc Global

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

The idea behind Evolution Petroleum and Dmc Global 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.