Correlation Between Kambi Group and Evolution
Can any of the company-specific risk be diversified away by investing in both Kambi Group and Evolution 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 Kambi Group and Evolution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kambi Group PLC and Evolution AB, you can compare the effects of market volatilities on Kambi Group and Evolution 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 Kambi Group with a short position of Evolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kambi Group and Evolution.
Diversification Opportunities for Kambi Group and Evolution
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kambi and Evolution is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kambi Group PLC and Evolution AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution AB and Kambi Group 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 Kambi Group PLC are associated (or correlated) with Evolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution AB has no effect on the direction of Kambi Group i.e., Kambi Group and Evolution go up and down completely randomly.
Pair Corralation between Kambi Group and Evolution
Assuming the 90 days trading horizon Kambi Group PLC is expected to generate 1.15 times more return on investment than Evolution. However, Kambi Group is 1.15 times more volatile than Evolution AB. It trades about 0.33 of its potential returns per unit of risk. Evolution AB is currently generating about -0.1 per unit of risk. If you would invest 10,400 in Kambi Group PLC on November 2, 2024 and sell it today you would earn a total of 1,870 from holding Kambi Group PLC or generate 17.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kambi Group PLC vs. Evolution AB
Performance |
| Timeline |
| Kambi Group PLC |
| Evolution AB |
Kambi Group and Evolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kambi Group and Evolution
The main advantage of trading using opposite Kambi Group and Evolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kambi Group position performs unexpectedly, Evolution 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 Evolution will offset losses from the drop in Evolution's long position.| Kambi Group vs. Evolution AB | Kambi Group vs. Embracer Group AB | Kambi Group vs. Betsson AB | Kambi Group vs. Catena Media plc |
| Evolution vs. Embracer Group AB | Evolution vs. Sinch AB | Evolution vs. Kambi Group PLC | Evolution vs. Samhllsbyggnadsbolaget i Norden |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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