Correlation Between Air Products and Evolution Gaming
Can any of the company-specific risk be diversified away by investing in both Air Products and Evolution Gaming 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 Air Products and Evolution Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Products Chemicals and Evolution Gaming Group, you can compare the effects of market volatilities on Air Products and Evolution Gaming 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 Air Products with a short position of Evolution Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Evolution Gaming.
Diversification Opportunities for Air Products and Evolution Gaming
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and Evolution is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Air Products Chemicals and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming and Air Products 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 Air Products Chemicals are associated (or correlated) with Evolution Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Gaming has no effect on the direction of Air Products i.e., Air Products and Evolution Gaming go up and down completely randomly.
Pair Corralation between Air Products and Evolution Gaming
Assuming the 90 days trading horizon Air Products Chemicals is expected to generate 0.57 times more return on investment than Evolution Gaming. However, Air Products Chemicals is 1.76 times less risky than Evolution Gaming. It trades about 0.53 of its potential returns per unit of risk. Evolution Gaming Group is currently generating about -0.01 per unit of risk. If you would invest 28,390 in Air Products Chemicals on November 3, 2024 and sell it today you would earn a total of 5,190 from holding Air Products Chemicals or generate 18.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products Chemicals vs. Evolution Gaming Group
Performance |
| Timeline |
| Air Products Chemicals |
| Evolution Gaming |
Air Products and Evolution Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Evolution Gaming
The main advantage of trading using opposite Air Products and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Evolution Gaming 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 Evolution Gaming will offset losses from the drop in Evolution Gaming's long position.| Air Products vs. National Beverage Corp | Air Products vs. Associated British Foods | Air Products vs. CAP LEASE AVIATION | Air Products vs. Geely Automobile Holdings |
| Evolution Gaming vs. Auto Trader Group | Evolution Gaming vs. Nordic Semiconductor ASA | Evolution Gaming vs. Litigation Capital Management | Evolution Gaming vs. BE Semiconductor Industries |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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