Correlation Between Evolution Gaming and Bausch Lomb
Can any of the company-specific risk be diversified away by investing in both Evolution Gaming and Bausch Lomb 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 Bausch Lomb 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 Bausch Lomb Corp, you can compare the effects of market volatilities on Evolution Gaming and Bausch Lomb 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 Bausch Lomb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and Bausch Lomb.
Diversification Opportunities for Evolution Gaming and Bausch Lomb
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Evolution and Bausch is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and Bausch Lomb Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Lomb Corp 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 Bausch Lomb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Lomb Corp has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and Bausch Lomb go up and down completely randomly.
Pair Corralation between Evolution Gaming and Bausch Lomb
Assuming the 90 days horizon Evolution Gaming Group is expected to under-perform the Bausch Lomb. But the pink sheet apears to be less risky and, when comparing its historical volatility, Evolution Gaming Group is 1.03 times less risky than Bausch Lomb. The pink sheet trades about -0.24 of its potential returns per unit of risk. The Bausch Lomb Corp is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,987 in Bausch Lomb Corp on September 4, 2024 and sell it today you would lose (40.00) from holding Bausch Lomb Corp or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Gaming Group vs. Bausch Lomb Corp
Performance |
| Timeline |
| Evolution Gaming |
| Bausch Lomb Corp |
Evolution Gaming and Bausch Lomb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Gaming and Bausch Lomb
The main advantage of trading using opposite Evolution Gaming and Bausch Lomb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming position performs unexpectedly, Bausch Lomb 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 Bausch Lomb will offset losses from the drop in Bausch Lomb's long position.| Evolution Gaming vs. Galaxy Gaming | Evolution Gaming vs. Everi Holdings | Evolution Gaming vs. Intema Solutions | Evolution Gaming vs. 888 Holdings |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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