Correlation Between Evolution Gaming and EJF Investments
Can any of the company-specific risk be diversified away by investing in both Evolution Gaming and EJF Investments 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 EJF Investments 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 EJF Investments, you can compare the effects of market volatilities on Evolution Gaming and EJF Investments 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 EJF Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and EJF Investments.
Diversification Opportunities for Evolution Gaming and EJF Investments
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Evolution and EJF is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and EJF Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EJF Investments 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 EJF Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EJF Investments has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and EJF Investments go up and down completely randomly.
Pair Corralation between Evolution Gaming and EJF Investments
Assuming the 90 days trading horizon Evolution Gaming Group is expected to under-perform the EJF Investments. In addition to that, Evolution Gaming is 1.55 times more volatile than EJF Investments. It trades about -0.09 of its total potential returns per unit of risk. EJF Investments is currently generating about 0.17 per unit of volatility. If you would invest 11,400 in EJF Investments on October 30, 2024 and sell it today you would earn a total of 1,100 from holding EJF Investments or generate 9.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Gaming Group vs. EJF Investments
Performance |
| Timeline |
| Evolution Gaming |
| EJF Investments |
Evolution Gaming and EJF Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Gaming and EJF Investments
The main advantage of trading using opposite Evolution Gaming and EJF Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming position performs unexpectedly, EJF Investments 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 EJF Investments will offset losses from the drop in EJF Investments' long position.| Evolution Gaming vs. Moneta Money Bank | Evolution Gaming vs. Baker Steel Resources | Evolution Gaming vs. Foresight Environmental Infrastructure | Evolution Gaming vs. Impax Environmental Markets |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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