Correlation Between Evolution Gaming and New Residential
Can any of the company-specific risk be diversified away by investing in both Evolution Gaming and New Residential 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 New Residential 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 New Residential Investment, you can compare the effects of market volatilities on Evolution Gaming and New Residential 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 New Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and New Residential.
Diversification Opportunities for Evolution Gaming and New Residential
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Evolution and New is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and New Residential Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Residential Inve 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 New Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Residential Inve has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and New Residential go up and down completely randomly.
Pair Corralation between Evolution Gaming and New Residential
Assuming the 90 days trading horizon Evolution Gaming Group is expected to under-perform the New Residential. In addition to that, Evolution Gaming is 1.39 times more volatile than New Residential Investment. It trades about -0.08 of its total potential returns per unit of risk. New Residential Investment is currently generating about 0.05 per unit of volatility. If you would invest 1,018 in New Residential Investment on September 1, 2024 and sell it today you would earn a total of 112.00 from holding New Residential Investment or generate 11.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.95% |
| Values | Daily Returns |
Evolution Gaming Group vs. New Residential Investment
Performance |
| Timeline |
| Evolution Gaming |
| New Residential Inve |
Evolution Gaming and New Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Gaming and New Residential
The main advantage of trading using opposite Evolution Gaming and New Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming position performs unexpectedly, New Residential 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 New Residential will offset losses from the drop in New Residential's long position.| Evolution Gaming vs. Uniper SE | Evolution Gaming vs. Mulberry Group PLC | Evolution Gaming vs. London Security Plc | Evolution Gaming vs. Triad Group PLC |
| New Residential vs. Uniper SE | New Residential vs. Mulberry Group PLC | New Residential vs. London Security Plc | New Residential 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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