Correlation Between Evolution Gaming and Flex
Can any of the company-specific risk be diversified away by investing in both Evolution Gaming and Flex 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 Flex 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 Flex, you can compare the effects of market volatilities on Evolution Gaming and Flex 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 Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and Flex.
Diversification Opportunities for Evolution Gaming and Flex
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Evolution and Flex is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and Flex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flex 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 Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flex has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and Flex go up and down completely randomly.
Pair Corralation between Evolution Gaming and Flex
Assuming the 90 days horizon Evolution Gaming Group is expected to under-perform the Flex. But the pink sheet apears to be less risky and, when comparing its historical volatility, Evolution Gaming Group is 2.02 times less risky than Flex. The pink sheet trades about -0.28 of its potential returns per unit of risk. The Flex is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 3,525 in Flex on August 28, 2024 and sell it today you would earn a total of 582.00 from holding Flex or generate 16.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Gaming Group vs. Flex
Performance |
| Timeline |
| Evolution Gaming |
| Flex |
Evolution Gaming and Flex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Gaming and Flex
The main advantage of trading using opposite Evolution Gaming and Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming position performs unexpectedly, Flex 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 Flex will offset losses from the drop in Flex's long position.| Evolution Gaming vs. Real Luck Group | Evolution Gaming vs. Betmakers Technology Group | Evolution Gaming vs. Jackpot Digital |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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