Correlation Between Evolution Gaming and Dream Finders
Can any of the company-specific risk be diversified away by investing in both Evolution Gaming and Dream Finders 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 Dream Finders 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 Dream Finders Homes, you can compare the effects of market volatilities on Evolution Gaming and Dream Finders 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 Dream Finders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and Dream Finders.
Diversification Opportunities for Evolution Gaming and Dream Finders
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Evolution and Dream is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and Dream Finders Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Finders Homes 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 Dream Finders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Finders Homes has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and Dream Finders go up and down completely randomly.
Pair Corralation between Evolution Gaming and Dream Finders
Assuming the 90 days horizon Evolution Gaming Group is expected to under-perform the Dream Finders. But the pink sheet apears to be less risky and, when comparing its historical volatility, Evolution Gaming Group is 1.16 times less risky than Dream Finders. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Dream Finders Homes is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,390 in Dream Finders Homes on October 22, 2024 and sell it today you would earn a total of 23.00 from holding Dream Finders Homes or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Evolution Gaming Group vs. Dream Finders Homes
Performance |
| Timeline |
| Evolution Gaming |
| Dream Finders Homes |
Evolution Gaming and Dream Finders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Gaming and Dream Finders
The main advantage of trading using opposite Evolution Gaming and Dream Finders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming position performs unexpectedly, Dream Finders 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 Dream Finders will offset losses from the drop in Dream Finders' long position.| Evolution Gaming vs. Galaxy Gaming | Evolution Gaming vs. Everi Holdings | Evolution Gaming vs. Intema Solutions | Evolution Gaming vs. 888 Holdings |
| Dream Finders vs. Hovnanian Enterprises | Dream Finders vs. Taylor Morn Home | Dream Finders vs. KB Home | Dream Finders vs. MI Homes |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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