Correlation Between Evolution Gaming and Federal Realty
Can any of the company-specific risk be diversified away by investing in both Evolution Gaming and Federal Realty 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 Federal Realty 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 Federal Realty Investment, you can compare the effects of market volatilities on Evolution Gaming and Federal Realty 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 Federal Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and Federal Realty.
Diversification Opportunities for Evolution Gaming and Federal Realty
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Evolution and Federal is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and Federal Realty Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Realty Investment 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 Federal Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Realty Investment has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and Federal Realty go up and down completely randomly.
Pair Corralation between Evolution Gaming and Federal Realty
Assuming the 90 days trading horizon Evolution Gaming Group is expected to under-perform the Federal Realty. In addition to that, Evolution Gaming is 2.1 times more volatile than Federal Realty Investment. It trades about -0.04 of its total potential returns per unit of risk. Federal Realty Investment is currently generating about 0.16 per unit of volatility. If you would invest 9,827 in Federal Realty Investment on August 29, 2024 and sell it today you would earn a total of 1,929 from holding Federal Realty Investment or generate 19.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.66% |
| Values | Daily Returns |
Evolution Gaming Group vs. Federal Realty Investment
Performance |
| Timeline |
| Evolution Gaming |
| Federal Realty Investment |
Evolution Gaming and Federal Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Gaming and Federal Realty
The main advantage of trading using opposite Evolution Gaming and Federal Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming position performs unexpectedly, Federal Realty 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 Federal Realty will offset losses from the drop in Federal Realty's long position.| Evolution Gaming vs. Lendinvest PLC | Evolution Gaming vs. Neometals | Evolution Gaming vs. Coor Service Management | Evolution Gaming vs. Albion Technology General |
| Federal Realty vs. Lendinvest PLC | Federal Realty vs. Neometals | Federal Realty vs. Coor Service Management | Federal Realty vs. Albion Technology General |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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