Correlation Between Evolution and Betsson AB
Can any of the company-specific risk be diversified away by investing in both Evolution and Betsson AB 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 Betsson AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution AB and Betsson AB, you can compare the effects of market volatilities on Evolution and Betsson AB 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 Betsson AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution and Betsson AB.
Diversification Opportunities for Evolution and Betsson AB
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Evolution and Betsson is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Evolution AB and Betsson AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betsson AB 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 Betsson AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betsson AB has no effect on the direction of Evolution i.e., Evolution and Betsson AB go up and down completely randomly.
Pair Corralation between Evolution and Betsson AB
Assuming the 90 days trading horizon Evolution AB is expected to under-perform the Betsson AB. In addition to that, Evolution is 2.34 times more volatile than Betsson AB. It trades about -0.15 of its total potential returns per unit of risk. Betsson AB is currently generating about -0.03 per unit of volatility. If you would invest 14,068 in Betsson AB on October 20, 2024 and sell it today you would lose (108.00) from holding Betsson AB or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution AB vs. Betsson AB
Performance |
| Timeline |
| Evolution AB |
| Betsson AB |
Evolution and Betsson AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution and Betsson AB
The main advantage of trading using opposite Evolution and Betsson AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution position performs unexpectedly, Betsson AB 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 Betsson AB will offset losses from the drop in Betsson AB's long position.| Evolution vs. Embracer Group AB | Evolution vs. Sinch AB | Evolution vs. Kambi Group PLC | Evolution vs. Samhllsbyggnadsbolaget i Norden |
| Betsson AB vs. Kambi Group PLC | Betsson AB vs. Catena Media plc | Betsson AB vs. Evolution AB | Betsson AB vs. Tele2 AB |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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