Correlation Between Light Science and Evolution Gaming
Can any of the company-specific risk be diversified away by investing in both Light Science 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 Science 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 Science Technologies and Evolution Gaming Group, you can compare the effects of market volatilities on Light Science 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 Science with a short position of Evolution Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Light Science and Evolution Gaming.
Diversification Opportunities for Light Science and Evolution Gaming
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Light and Evolution is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Light Science Technologies 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 Science 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 Science Technologies 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 Science i.e., Light Science and Evolution Gaming go up and down completely randomly.
Pair Corralation between Light Science and Evolution Gaming
Assuming the 90 days trading horizon Light Science Technologies is expected to generate 0.9 times more return on investment than Evolution Gaming. However, Light Science Technologies is 1.12 times less risky than Evolution Gaming. It trades about -0.14 of its potential returns per unit of risk. Evolution Gaming Group is currently generating about -0.14 per unit of risk. If you would invest 285.00 in Light Science Technologies on October 15, 2024 and sell it today you would lose (20.00) from holding Light Science Technologies or give up 7.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Light Science Technologies vs. Evolution Gaming Group
Performance |
| Timeline |
| Light Science Techno |
| Evolution Gaming |
Light Science and Evolution Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Light Science and Evolution Gaming
The main advantage of trading using opposite Light Science and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Light Science 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 Science vs. SupplyMe Capital PLC | Light Science vs. SM Energy Co | Light Science vs. FuelCell Energy | Light Science vs. Grand Vision Media |
| Evolution Gaming vs. Light Science Technologies | Evolution Gaming vs. Sartorius Stedim Biotech | Evolution Gaming vs. American Homes 4 | Evolution Gaming vs. Home Depot |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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