Correlation Between Evolution Gaming and Eastern
Can any of the company-specific risk be diversified away by investing in both Evolution Gaming and Eastern 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 Eastern 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 Eastern Co, you can compare the effects of market volatilities on Evolution Gaming and Eastern 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 Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and Eastern.
Diversification Opportunities for Evolution Gaming and Eastern
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Evolution and Eastern is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern 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 Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and Eastern go up and down completely randomly.
Pair Corralation between Evolution Gaming and Eastern
Assuming the 90 days horizon Evolution Gaming Group is expected to under-perform the Eastern. But the pink sheet apears to be less risky and, when comparing its historical volatility, Evolution Gaming Group is 1.87 times less risky than Eastern. The pink sheet trades about -0.22 of its potential returns per unit of risk. The Eastern Co is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 3,070 in Eastern Co on September 2, 2024 and sell it today you would lose (198.00) from holding Eastern Co or give up 6.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Gaming Group vs. Eastern Co
Performance |
| Timeline |
| Evolution Gaming |
| Eastern |
Evolution Gaming and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Gaming and Eastern
The main advantage of trading using opposite Evolution Gaming and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming position performs unexpectedly, Eastern 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 Eastern will offset losses from the drop in Eastern'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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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