Correlation Between Evolution Gaming and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Evolution Gaming and Ross Stores 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 Ross Stores 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 Ross Stores, you can compare the effects of market volatilities on Evolution Gaming and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and Ross Stores.
Diversification Opportunities for Evolution Gaming and Ross Stores
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evolution and Ross is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and Ross Stores go up and down completely randomly.
Pair Corralation between Evolution Gaming and Ross Stores
Assuming the 90 days trading horizon Evolution Gaming Group is expected to under-perform the Ross Stores. In addition to that, Evolution Gaming is 1.49 times more volatile than Ross Stores. It trades about -0.07 of its total potential returns per unit of risk. Ross Stores is currently generating about 0.03 per unit of volatility. If you would invest 14,227 in Ross Stores on November 3, 2024 and sell it today you would earn a total of 1,051 from holding Ross Stores or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Evolution Gaming Group vs. Ross Stores
Performance |
| Timeline |
| Evolution Gaming |
| Ross Stores |
Evolution Gaming and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Gaming and Ross Stores
The main advantage of trading using opposite Evolution Gaming and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| Evolution Gaming vs. Auto Trader Group | Evolution Gaming vs. Nordic Semiconductor ASA | Evolution Gaming vs. Litigation Capital Management | Evolution Gaming vs. BE Semiconductor Industries |
| Ross Stores vs. Fresenius Medical Care | Ross Stores vs. URU Metals | Ross Stores vs. Central Asia Metals | Ross Stores vs. First Class Metals |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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