Correlation Between Ainsworth Game and Evolution Gaming
Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and Evolution Gaming 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 Ainsworth Game and Evolution Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ainsworth Game Technology and Evolution Gaming Group, you can compare the effects of market volatilities on Ainsworth Game and Evolution Gaming 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 Ainsworth Game with a short position of Evolution Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and Evolution Gaming.
Diversification Opportunities for Ainsworth Game and Evolution Gaming
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ainsworth and Evolution is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming and Ainsworth Game 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 Ainsworth Game Technology are associated (or correlated) with Evolution Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Gaming has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Evolution Gaming go up and down completely randomly.
Pair Corralation between Ainsworth Game and Evolution Gaming
Assuming the 90 days horizon Ainsworth Game Technology is expected to generate 1.63 times more return on investment than Evolution Gaming. However, Ainsworth Game is 1.63 times more volatile than Evolution Gaming Group. It trades about -0.09 of its potential returns per unit of risk. Evolution Gaming Group is currently generating about -0.17 per unit of risk. If you would invest 49.00 in Ainsworth Game Technology on August 30, 2024 and sell it today you would lose (2.00) from holding Ainsworth Game Technology or give up 4.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ainsworth Game Technology vs. Evolution Gaming Group
Performance |
| Timeline |
| Ainsworth Game Technology |
| Evolution Gaming |
Ainsworth Game and Evolution Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ainsworth Game and Evolution Gaming
The main advantage of trading using opposite Ainsworth Game and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, Evolution Gaming 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 Evolution Gaming will offset losses from the drop in Evolution Gaming's long position.| Ainsworth Game vs. Light Wonder | Ainsworth Game vs. Nasdaq Inc | Ainsworth Game vs. Vertiv Holdings Co | Ainsworth Game vs. IONQ Inc |
| Evolution Gaming vs. Galaxy Gaming | Evolution Gaming vs. Everi Holdings | Evolution Gaming vs. Intema Solutions | Evolution Gaming vs. 888 Holdings |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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