Correlation Between Light Wonder and Evolution Gaming
Can any of the company-specific risk be diversified away by investing in both Light Wonder and Evolution Gaming 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 Light Wonder and Evolution Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Light Wonder and Evolution Gaming Group, you can compare the effects of market volatilities on Light Wonder and Evolution Gaming 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 Light Wonder with a short position of Evolution Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Light Wonder and Evolution Gaming.
Diversification Opportunities for Light Wonder and Evolution Gaming
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Light and Evolution is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Light Wonder and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming and Light Wonder 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 Light Wonder are associated (or correlated) with Evolution Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Gaming has no effect on the direction of Light Wonder i.e., Light Wonder and Evolution Gaming go up and down completely randomly.
Pair Corralation between Light Wonder and Evolution Gaming
Considering the 90-day investment horizon Light Wonder is expected to generate 1.08 times more return on investment than Evolution Gaming. However, Light Wonder is 1.08 times more volatile than Evolution Gaming Group. It trades about 0.05 of its potential returns per unit of risk. Evolution Gaming Group is currently generating about -0.01 per unit of risk. If you would invest 7,584 in Light Wonder on August 29, 2024 and sell it today you would earn a total of 2,124 from holding Light Wonder or generate 28.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Light Wonder vs. Evolution Gaming Group
Performance |
| Timeline |
| Light Wonder |
| Evolution Gaming |
Light Wonder and Evolution Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Light Wonder and Evolution Gaming
The main advantage of trading using opposite Light Wonder and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Light Wonder position performs unexpectedly, Evolution Gaming 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 Gaming will offset losses from the drop in Evolution Gaming's long position.| Light Wonder vs. Codere Online Corp | Light Wonder vs. Inspired Entertainment | Light Wonder vs. International Game Technology | Light Wonder vs. Accel Entertainment |
| Evolution Gaming vs. Light Wonder | Evolution Gaming vs. Nasdaq Inc | Evolution Gaming vs. Vertiv Holdings Co | Evolution Gaming vs. IONQ Inc |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |