Correlation Between Evolution and Ainsworth Game
Can any of the company-specific risk be diversified away by investing in both Evolution and Ainsworth Game 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 and Ainsworth Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution AB and Ainsworth Game Technology, you can compare the effects of market volatilities on Evolution and Ainsworth Game 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 with a short position of Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution and Ainsworth Game.
Diversification Opportunities for Evolution and Ainsworth Game
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Evolution and Ainsworth is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Evolution AB and Ainsworth Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ainsworth Game Technology and Evolution 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 AB are associated (or correlated) with Ainsworth Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ainsworth Game Technology has no effect on the direction of Evolution i.e., Evolution and Ainsworth Game go up and down completely randomly.
Pair Corralation between Evolution and Ainsworth Game
Assuming the 90 days horizon Evolution AB is expected to generate 0.65 times more return on investment than Ainsworth Game. However, Evolution AB is 1.53 times less risky than Ainsworth Game. It trades about -0.15 of its potential returns per unit of risk. Ainsworth Game Technology is currently generating about -0.2 per unit of risk. If you would invest 9,406 in Evolution AB on August 31, 2024 and sell it today you would lose (353.00) from holding Evolution AB or give up 3.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution AB vs. Ainsworth Game Technology
Performance |
| Timeline |
| Evolution AB |
| Ainsworth Game Technology |
Evolution and Ainsworth Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution and Ainsworth Game
The main advantage of trading using opposite Evolution and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution position performs unexpectedly, Ainsworth Game 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 Ainsworth Game will offset losses from the drop in Ainsworth Game's long position.| Evolution vs. Greek Org of | Evolution vs. Galaxy Gaming | Evolution vs. Churchill Downs Incorporated | Evolution vs. Good Gaming |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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