Correlation Between Evolution Gaming and Spectra Systems
Can any of the company-specific risk be diversified away by investing in both Evolution Gaming and Spectra Systems 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 Spectra Systems 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 Spectra Systems Corp, you can compare the effects of market volatilities on Evolution Gaming and Spectra Systems 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 Spectra Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and Spectra Systems.
Diversification Opportunities for Evolution Gaming and Spectra Systems
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Evolution and Spectra is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and Spectra Systems Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectra Systems Corp 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 Spectra Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectra Systems Corp has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and Spectra Systems go up and down completely randomly.
Pair Corralation between Evolution Gaming and Spectra Systems
Assuming the 90 days trading horizon Evolution Gaming Group is expected to under-perform the Spectra Systems. In addition to that, Evolution Gaming is 1.25 times more volatile than Spectra Systems Corp. It trades about -0.04 of its total potential returns per unit of risk. Spectra Systems Corp is currently generating about 0.0 per unit of volatility. If you would invest 23,200 in Spectra Systems Corp on November 30, 2024 and sell it today you would lose (200.00) from holding Spectra Systems Corp or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Gaming Group vs. Spectra Systems Corp
Performance |
| Timeline |
| Evolution Gaming |
| Spectra Systems Corp |
Evolution Gaming and Spectra Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Gaming and Spectra Systems
The main advantage of trading using opposite Evolution Gaming and Spectra Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming position performs unexpectedly, Spectra Systems 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 Spectra Systems will offset losses from the drop in Spectra Systems' long position.| Evolution Gaming vs. Fevertree Drinks Plc | Evolution Gaming vs. Associated British Foods | Evolution Gaming vs. Austevoll Seafood ASA | Evolution Gaming vs. Dairy Farm International |
| Spectra Systems vs. Zegona Communications Plc | Spectra Systems vs. EJF Investments | Spectra Systems vs. Lindsell Train Investment | Spectra Systems vs. United Internet AG |
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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