Correlation Between Evolution Gaming and MG Credit
Can any of the company-specific risk be diversified away by investing in both Evolution Gaming and MG Credit 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 MG Credit 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 MG Credit Income, you can compare the effects of market volatilities on Evolution Gaming and MG Credit 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 MG Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and MG Credit.
Diversification Opportunities for Evolution Gaming and MG Credit
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Evolution and MGCI is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and MG Credit Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MG Credit Income 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 MG Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MG Credit Income has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and MG Credit go up and down completely randomly.
Pair Corralation between Evolution Gaming and MG Credit
Assuming the 90 days trading horizon Evolution Gaming Group is expected to under-perform the MG Credit. In addition to that, Evolution Gaming is 1.25 times more volatile than MG Credit Income. It trades about -0.02 of its total potential returns per unit of risk. MG Credit Income is currently generating about 0.03 per unit of volatility. If you would invest 8,023 in MG Credit Income on October 15, 2024 and sell it today you would earn a total of 1,477 from holding MG Credit Income or generate 18.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Evolution Gaming Group vs. MG Credit Income
Performance |
| Timeline |
| Evolution Gaming |
| MG Credit Income |
Evolution Gaming and MG Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Gaming and MG Credit
The main advantage of trading using opposite Evolution Gaming and MG Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming position performs unexpectedly, MG Credit 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 MG Credit will offset losses from the drop in MG Credit'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 |
| MG Credit vs. Fidelity National Information | MG Credit vs. Compal Electronics GDR | MG Credit vs. Micron Technology | MG Credit vs. Concurrent Technologies 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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