Correlation Between National Beverage and Evolution Gaming
Can any of the company-specific risk be diversified away by investing in both National Beverage 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 National Beverage and Evolution Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Beverage Corp and Evolution Gaming Group, you can compare the effects of market volatilities on National Beverage 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 National Beverage with a short position of Evolution Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Evolution Gaming.
Diversification Opportunities for National Beverage and Evolution Gaming
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Evolution is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming and National Beverage 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 National Beverage Corp 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 National Beverage i.e., National Beverage and Evolution Gaming go up and down completely randomly.
Pair Corralation between National Beverage and Evolution Gaming
Assuming the 90 days trading horizon National Beverage Corp is expected to under-perform the Evolution Gaming. In addition to that, National Beverage is 1.33 times more volatile than Evolution Gaming Group. It trades about -0.13 of its total potential returns per unit of risk. Evolution Gaming Group is currently generating about -0.08 per unit of volatility. If you would invest 97,033 in Evolution Gaming Group on September 13, 2024 and sell it today you would lose (2,883) from holding Evolution Gaming Group or give up 2.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. Evolution Gaming Group
Performance |
| Timeline |
| National Beverage Corp |
| Evolution Gaming |
National Beverage and Evolution Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Evolution Gaming
The main advantage of trading using opposite National Beverage and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage 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.| National Beverage vs. Pets at Home | National Beverage vs. Aeorema Communications Plc | National Beverage vs. Extra Space Storage | National Beverage vs. CAP LEASE AVIATION |
| Evolution Gaming vs. Eastinco Mining Exploration | Evolution Gaming vs. Roper Technologies | Evolution Gaming vs. Scandic Hotels Group | Evolution Gaming vs. L3Harris Technologies |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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