Correlation Between Evolution Petroleum and Infinity Natural

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

By analyzing existing cross correlation between Evolution Petroleum and Infinity Natural Resources,, you can compare the effects of market volatilities on Evolution Petroleum and Infinity Natural 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 Infinity Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Petroleum and Infinity Natural.

Diversification Opportunities for Evolution Petroleum and Infinity Natural

0.75

Correlation Coefficient

Evolution Petroleum  Infinity Natural

Poor diversification

The 3 months correlation between Evolution and Infinity is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Petroleum and Infinity Natural Resources, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinity Natural Res 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 Infinity Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinity Natural Res has no effect on the direction of Evolution Petroleum i.e., Evolution Petroleum and Infinity Natural go up and down completely randomly.

Pair Corralation between Evolution Petroleum and Infinity Natural

Considering the 90-day investment horizon Evolution Petroleum is expected to under-perform the Infinity Natural. But the stock apears to be less risky and, when comparing its historical volatility, Evolution Petroleum is 2.42 times less risky than Infinity Natural. The stock trades about -0.25 of its potential returns per unit of risk. The Infinity Natural Resources, is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,200  in Infinity Natural Resources, on August 19, 2025 and sell it today you would earn a total of  95.00  from holding Infinity Natural Resources, or generate 7.92% return on investment over 90 days.

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

Evolution Petroleum  vs.  Infinity Natural Resources,

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 inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Infinity Natural Res

Risk-Adjusted Performance

Weakest

Over the last 90 days Infinity Natural Resources, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Infinity Natural is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Evolution Petroleum and Infinity Natural

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

The idea behind Evolution Petroleum and Infinity Natural Resources, 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.