Correlation Between Evolution Gaming and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Evolution Gaming and Catalyst Media 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 Catalyst Media 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 Catalyst Media Group, you can compare the effects of market volatilities on Evolution Gaming and Catalyst Media 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 Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and Catalyst Media.
Diversification Opportunities for Evolution Gaming and Catalyst Media
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Evolution and Catalyst is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and Catalyst Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Media Group 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 Catalyst Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Media Group has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and Catalyst Media go up and down completely randomly.
Pair Corralation between Evolution Gaming and Catalyst Media
Assuming the 90 days trading horizon Evolution Gaming Group is expected to under-perform the Catalyst Media. In addition to that, Evolution Gaming is 1.19 times more volatile than Catalyst Media Group. It trades about -0.06 of its total potential returns per unit of risk. Catalyst Media Group is currently generating about -0.05 per unit of volatility. If you would invest 10,250 in Catalyst Media Group on October 16, 2024 and sell it today you would lose (2,250) from holding Catalyst Media Group or give up 21.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Gaming Group vs. Catalyst Media Group
Performance |
| Timeline |
| Evolution Gaming |
| Catalyst Media Group |
Evolution Gaming and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Gaming and Catalyst Media
The main advantage of trading using opposite Evolution Gaming and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming position performs unexpectedly, Catalyst Media 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 Catalyst Media will offset losses from the drop in Catalyst Media's long position.| Evolution Gaming vs. Sabre Insurance Group | Evolution Gaming vs. Norwegian Air Shuttle | Evolution Gaming vs. Sealed Air Corp | Evolution Gaming vs. Lundin Mining Corp |
| Catalyst Media vs. Evolution Gaming Group | Catalyst Media vs. Caledonia Investments | Catalyst Media vs. Herald Investment Trust | Catalyst Media vs. FC Investment Trust |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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