Correlation Between Evolution Gaming and Cool
Can any of the company-specific risk be diversified away by investing in both Evolution Gaming and Cool 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 Cool 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 Cool Company, you can compare the effects of market volatilities on Evolution Gaming and Cool 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 Cool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and Cool.
Diversification Opportunities for Evolution Gaming and Cool
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Evolution and Cool is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and Cool Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cool Company 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 Cool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cool Company has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and Cool go up and down completely randomly.
Pair Corralation between Evolution Gaming and Cool
Assuming the 90 days horizon Evolution Gaming Group is expected to generate 0.88 times more return on investment than Cool. However, Evolution Gaming Group is 1.14 times less risky than Cool. It trades about 0.02 of its potential returns per unit of risk. Cool Company is currently generating about -0.18 per unit of risk. If you would invest 7,600 in Evolution Gaming Group on November 9, 2024 and sell it today you would earn a total of 39.00 from holding Evolution Gaming Group or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Gaming Group vs. Cool Company
Performance |
| Timeline |
| Evolution Gaming |
| Cool Company |
Evolution Gaming and Cool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Gaming and Cool
The main advantage of trading using opposite Evolution Gaming and Cool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming position performs unexpectedly, Cool 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 Cool will offset losses from the drop in Cool's long position.| Evolution Gaming vs. Galaxy Gaming | Evolution Gaming vs. Everi Holdings | Evolution Gaming vs. Intema Solutions | Evolution Gaming vs. 888 Holdings |
| Cool vs. Primoris Services | Cool vs. Tritent International Agriculture | Cool vs. Mattel Inc | Cool vs. Hurco Companies |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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