Correlation Between Evolution Gaming and KILROY

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Can any of the company-specific risk be diversified away by investing in both Evolution Gaming and KILROY 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 KILROY 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 KILROY RLTY L, you can compare the effects of market volatilities on Evolution Gaming and KILROY 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 KILROY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and KILROY.

Diversification Opportunities for Evolution Gaming and KILROY

0.41
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Evolution and KILROY is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and KILROY RLTY L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KILROY RLTY L 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 KILROY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KILROY RLTY L has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and KILROY go up and down completely randomly.

Pair Corralation between Evolution Gaming and KILROY

Assuming the 90 days horizon Evolution Gaming Group is expected to under-perform the KILROY. In addition to that, Evolution Gaming is 3.75 times more volatile than KILROY RLTY L. It trades about -0.07 of its total potential returns per unit of risk. KILROY RLTY L is currently generating about -0.03 per unit of volatility. If you would invest  9,777  in KILROY RLTY L on September 3, 2024 and sell it today you would lose (202.00) from holding KILROY RLTY L or give up 2.07% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy86.99%
ValuesDaily Returns

Evolution Gaming Group  vs.  KILROY RLTY L

 Performance 
       Timeline  
Evolution Gaming 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Evolution Gaming Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
KILROY RLTY L 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days KILROY RLTY L has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, KILROY is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Evolution Gaming and KILROY Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Evolution Gaming and KILROY

The main advantage of trading using opposite Evolution Gaming and KILROY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming position performs unexpectedly, KILROY 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 KILROY will offset losses from the drop in KILROY's long position.
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The idea behind Evolution Gaming Group and KILROY RLTY L pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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