Correlation Between Everi Holdings and Sturm Ruger

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Can any of the company-specific risk be diversified away by investing in both Everi Holdings and Sturm Ruger 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 Everi Holdings and Sturm Ruger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Everi Holdings and Sturm Ruger, you can compare the effects of market volatilities on Everi Holdings and Sturm Ruger 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 Everi Holdings with a short position of Sturm Ruger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everi Holdings and Sturm Ruger.

Diversification Opportunities for Everi Holdings and Sturm Ruger

-0.77
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Everi and Sturm is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Everi Holdings and Sturm Ruger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sturm Ruger and Everi Holdings 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 Everi Holdings are associated (or correlated) with Sturm Ruger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sturm Ruger has no effect on the direction of Everi Holdings i.e., Everi Holdings and Sturm Ruger go up and down completely randomly.

Pair Corralation between Everi Holdings and Sturm Ruger

Given the investment horizon of 90 days Everi Holdings is expected to generate 2.56 times more return on investment than Sturm Ruger. However, Everi Holdings is 2.56 times more volatile than Sturm Ruger. It trades about 0.12 of its potential returns per unit of risk. Sturm Ruger is currently generating about -0.06 per unit of risk. If you would invest  794.00  in Everi Holdings on September 12, 2024 and sell it today you would earn a total of  552.00  from holding Everi Holdings or generate 69.52% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Everi Holdings  vs.  Sturm Ruger

 Performance 
       Timeline  
Everi Holdings 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Everi Holdings are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Everi Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.
Sturm Ruger 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sturm Ruger has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest abnormal performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Everi Holdings and Sturm Ruger Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Everi Holdings and Sturm Ruger

The main advantage of trading using opposite Everi Holdings and Sturm Ruger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everi Holdings position performs unexpectedly, Sturm Ruger 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 Sturm Ruger will offset losses from the drop in Sturm Ruger's long position.
The idea behind Everi Holdings and Sturm Ruger pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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