Correlation Between Evolution Gaming and Arq
Can any of the company-specific risk be diversified away by investing in both Evolution Gaming and Arq 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 Gaming and Arq into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution Gaming Group and Arq Inc, you can compare the effects of market volatilities on Evolution Gaming and Arq 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 Gaming with a short position of Arq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and Arq.
Diversification Opportunities for Evolution Gaming and Arq
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Evolution and Arq is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and Arq Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arq Inc and Evolution Gaming 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 Gaming Group are associated (or correlated) with Arq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arq Inc has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and Arq go up and down completely randomly.
Pair Corralation between Evolution Gaming and Arq
Assuming the 90 days horizon Evolution Gaming Group is expected to generate 0.91 times more return on investment than Arq. However, Evolution Gaming Group is 1.09 times less risky than Arq. It trades about 0.07 of its potential returns per unit of risk. Arq Inc is currently generating about -0.25 per unit of risk. If you would invest 7,768 in Evolution Gaming Group on November 3, 2024 and sell it today you would earn a total of 247.00 from holding Evolution Gaming Group or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Gaming Group vs. Arq Inc
Performance |
| Timeline |
| Evolution Gaming |
| Arq Inc |
Evolution Gaming and Arq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Gaming and Arq
The main advantage of trading using opposite Evolution Gaming and Arq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming position performs unexpectedly, Arq 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 Arq will offset losses from the drop in Arq's long position.| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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