Correlation Between Federal Realty and Evolution Gaming
Can any of the company-specific risk be diversified away by investing in both Federal Realty 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 Federal Realty and Evolution Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Realty Investment and Evolution Gaming Group, you can compare the effects of market volatilities on Federal Realty 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 Federal Realty with a short position of Evolution Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Realty and Evolution Gaming.
Diversification Opportunities for Federal Realty and Evolution Gaming
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Federal and Evolution is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Federal Realty Investment and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming and Federal Realty 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 Federal Realty Investment 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 Federal Realty i.e., Federal Realty and Evolution Gaming go up and down completely randomly.
Pair Corralation between Federal Realty and Evolution Gaming
Assuming the 90 days trading horizon Federal Realty Investment is expected to generate 0.54 times more return on investment than Evolution Gaming. However, Federal Realty Investment is 1.86 times less risky than Evolution Gaming. It trades about 0.1 of its potential returns per unit of risk. Evolution Gaming Group is currently generating about -0.08 per unit of risk. If you would invest 9,885 in Federal Realty Investment on September 1, 2024 and sell it today you would earn a total of 1,871 from holding Federal Realty Investment or generate 18.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.88% |
| Values | Daily Returns |
Federal Realty Investment vs. Evolution Gaming Group
Performance |
| Timeline |
| Federal Realty Investment |
| Evolution Gaming |
Federal Realty and Evolution Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Realty and Evolution Gaming
The main advantage of trading using opposite Federal Realty and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Realty 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.| Federal Realty vs. FC Investment Trust | Federal Realty vs. Batm Advanced Communications | Federal Realty vs. Verizon Communications | Federal Realty vs. Cellnex Telecom SA |
| Evolution Gaming vs. Uniper SE | Evolution Gaming vs. Mulberry Group PLC | Evolution Gaming vs. London Security Plc | Evolution Gaming vs. Triad Group PLC |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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