Correlation Between Evolution Gaming and BW Offshore
Can any of the company-specific risk be diversified away by investing in both Evolution Gaming and BW Offshore 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 BW Offshore 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 BW Offshore Limited, you can compare the effects of market volatilities on Evolution Gaming and BW Offshore 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 BW Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and BW Offshore.
Diversification Opportunities for Evolution Gaming and BW Offshore
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evolution and BWOFY is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and BW Offshore Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore Limited 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 BW Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW Offshore Limited has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and BW Offshore go up and down completely randomly.
Pair Corralation between Evolution Gaming and BW Offshore
Assuming the 90 days horizon Evolution Gaming Group is expected to under-perform the BW Offshore. In addition to that, Evolution Gaming is 1.27 times more volatile than BW Offshore Limited. It trades about -0.25 of its total potential returns per unit of risk. BW Offshore Limited is currently generating about -0.06 per unit of volatility. If you would invest 559.00 in BW Offshore Limited on August 29, 2024 and sell it today you would lose (9.00) from holding BW Offshore Limited or give up 1.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Gaming Group vs. BW Offshore Limited
Performance |
| Timeline |
| Evolution Gaming |
| BW Offshore Limited |
Evolution Gaming and BW Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Gaming and BW Offshore
The main advantage of trading using opposite Evolution Gaming and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming position performs unexpectedly, BW Offshore 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 BW Offshore will offset losses from the drop in BW Offshore's long position.| Evolution Gaming vs. Light Wonder | Evolution Gaming vs. Nasdaq Inc | Evolution Gaming vs. Vertiv Holdings Co | Evolution Gaming vs. IONQ Inc |
| BW Offshore vs. Legacy Education | BW Offshore vs. Apple Inc | BW Offshore vs. NVIDIA | BW Offshore vs. Microsoft |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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