Correlation Between Evolution Gaming and United Internet
Can any of the company-specific risk be diversified away by investing in both Evolution Gaming and United Internet 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 United Internet 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 United Internet AG, you can compare the effects of market volatilities on Evolution Gaming and United Internet 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 United Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and United Internet.
Diversification Opportunities for Evolution Gaming and United Internet
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Evolution and United is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and United Internet AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Internet AG 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 United Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Internet AG has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and United Internet go up and down completely randomly.
Pair Corralation between Evolution Gaming and United Internet
Assuming the 90 days trading horizon Evolution Gaming Group is expected to under-perform the United Internet. In addition to that, Evolution Gaming is 1.33 times more volatile than United Internet AG. It trades about -0.08 of its total potential returns per unit of risk. United Internet AG is currently generating about 0.03 per unit of volatility. If you would invest 1,603 in United Internet AG on September 13, 2024 and sell it today you would earn a total of 8.00 from holding United Internet AG or generate 0.5% 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. United Internet AG
Performance |
| Timeline |
| Evolution Gaming |
| United Internet AG |
Evolution Gaming and United Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Gaming and United Internet
The main advantage of trading using opposite Evolution Gaming and United Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming position performs unexpectedly, United Internet 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 United Internet will offset losses from the drop in United Internet's long position.| Evolution Gaming vs. Eastinco Mining Exploration | Evolution Gaming vs. Roper Technologies | Evolution Gaming vs. Scandic Hotels Group | Evolution Gaming vs. L3Harris Technologies |
| United Internet vs. Tyson Foods Cl | United Internet vs. Virgin Wines UK | United Internet vs. Ebro Foods | United Internet vs. Vienna Insurance Group |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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