Correlation Between Electrica and Evolution Gaming
Can any of the company-specific risk be diversified away by investing in both Electrica 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 Electrica and Evolution Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrica SA and Evolution Gaming Group, you can compare the effects of market volatilities on Electrica 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 Electrica with a short position of Evolution Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrica and Evolution Gaming.
Diversification Opportunities for Electrica and Evolution Gaming
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Electrica and Evolution is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Electrica SA and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming and Electrica 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 Electrica SA 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 Electrica i.e., Electrica and Evolution Gaming go up and down completely randomly.
Pair Corralation between Electrica and Evolution Gaming
If you would invest 1,300 in Electrica SA on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Electrica SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electrica SA vs. Evolution Gaming Group
Performance |
| Timeline |
| Electrica SA |
| Evolution Gaming |
Electrica and Evolution Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrica and Evolution Gaming
The main advantage of trading using opposite Electrica and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrica 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.| Electrica vs. Darden Restaurants | Electrica vs. CVS Health Corp | Electrica vs. Various Eateries PLC | Electrica vs. Fulcrum Metals PLC |
| Evolution Gaming vs. Eastinco Mining Exploration | Evolution Gaming vs. Roper Technologies | Evolution Gaming vs. Scandic Hotels Group | Evolution Gaming vs. L3Harris Technologies |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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