Correlation Between Evolution Gaming and AstraZeneca PLC
Can any of the company-specific risk be diversified away by investing in both Evolution Gaming and AstraZeneca PLC 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 Gaming and AstraZeneca PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution Gaming Group and AstraZeneca PLC ADR, you can compare the effects of market volatilities on Evolution Gaming and AstraZeneca PLC 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 Gaming with a short position of AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and AstraZeneca PLC.
Diversification Opportunities for Evolution Gaming and AstraZeneca PLC
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Evolution and AstraZeneca is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and AstraZeneca PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC ADR and Evolution Gaming 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 Gaming Group are associated (or correlated) with AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC ADR has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and AstraZeneca PLC go up and down completely randomly.
Pair Corralation between Evolution Gaming and AstraZeneca PLC
Assuming the 90 days trading horizon Evolution Gaming Group is expected to under-perform the AstraZeneca PLC. In addition to that, Evolution Gaming is 1.97 times more volatile than AstraZeneca PLC ADR. It trades about -0.16 of its total potential returns per unit of risk. AstraZeneca PLC ADR is currently generating about 0.04 per unit of volatility. If you would invest 6,560 in AstraZeneca PLC ADR on October 23, 2024 and sell it today you would earn a total of 118.00 from holding AstraZeneca PLC ADR or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Gaming Group vs. AstraZeneca PLC ADR
Performance |
| Timeline |
| Evolution Gaming |
| AstraZeneca PLC ADR |
Evolution Gaming and AstraZeneca PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Gaming and AstraZeneca PLC
The main advantage of trading using opposite Evolution Gaming and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming position performs unexpectedly, AstraZeneca PLC 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 AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC's long position.| Evolution Gaming vs. Air Products Chemicals | Evolution Gaming vs. Spirent Communications plc | Evolution Gaming vs. Travel Leisure Co | Evolution Gaming vs. United Utilities Group |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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