Correlation Between Evolution Gaming and Summit Materials
Can any of the company-specific risk be diversified away by investing in both Evolution Gaming and Summit Materials 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 Summit Materials 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 Summit Materials, you can compare the effects of market volatilities on Evolution Gaming and Summit Materials 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 Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and Summit Materials.
Diversification Opportunities for Evolution Gaming and Summit Materials
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Evolution and Summit is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials 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 Summit Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Materials has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and Summit Materials go up and down completely randomly.
Pair Corralation between Evolution Gaming and Summit Materials
Assuming the 90 days horizon Evolution Gaming Group is expected to under-perform the Summit Materials. But the pink sheet apears to be less risky and, when comparing its historical volatility, Evolution Gaming Group is 1.74 times less risky than Summit Materials. The pink sheet trades about -0.29 of its potential returns per unit of risk. The Summit Materials is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4,563 in Summit Materials on August 28, 2024 and sell it today you would earn a total of 512.00 from holding Summit Materials or generate 11.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Gaming Group vs. Summit Materials
Performance |
| Timeline |
| Evolution Gaming |
| Summit Materials |
Evolution Gaming and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Gaming and Summit Materials
The main advantage of trading using opposite Evolution Gaming and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming position performs unexpectedly, Summit Materials 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 Summit Materials will offset losses from the drop in Summit Materials' long position.| Evolution Gaming vs. Real Luck Group | Evolution Gaming vs. Betmakers Technology Group | Evolution Gaming vs. Jackpot Digital |
| Summit Materials vs. Martin Marietta Materials | Summit Materials vs. Vulcan Materials | Summit Materials vs. United States Lime | Summit Materials vs. James Hardie Industries |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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