Correlation Between Neogames and Esports Entertainment
Can any of the company-specific risk be diversified away by investing in both Neogames and Esports Entertainment 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 Neogames and Esports Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neogames SA and Esports Entertainment Group, you can compare the effects of market volatilities on Neogames and Esports Entertainment 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 Neogames with a short position of Esports Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neogames and Esports Entertainment.
Diversification Opportunities for Neogames and Esports Entertainment
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Neogames and Esports is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Neogames SA and Esports Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esports Entertainment and Neogames 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 Neogames SA are associated (or correlated) with Esports Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esports Entertainment has no effect on the direction of Neogames i.e., Neogames and Esports Entertainment go up and down completely randomly.
Pair Corralation between Neogames and Esports Entertainment
Given the investment horizon of 90 days Neogames SA is expected to generate 0.11 times more return on investment than Esports Entertainment. However, Neogames SA is 8.79 times less risky than Esports Entertainment. It trades about 0.26 of its potential returns per unit of risk. Esports Entertainment Group is currently generating about -0.69 per unit of risk. If you would invest 2,633 in Neogames SA on August 28, 2024 and sell it today you would earn a total of 76.00 from holding Neogames SA or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neogames SA vs. Esports Entertainment Group
Performance |
| Timeline |
| Neogames SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Esports Entertainment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Neogames and Esports Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neogames and Esports Entertainment
The main advantage of trading using opposite Neogames and Esports Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neogames position performs unexpectedly, Esports Entertainment 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 Esports Entertainment will offset losses from the drop in Esports Entertainment's long position.| Neogames vs. Accel Entertainment | Neogames vs. PlayAGS | Neogames vs. International Game Technology | Neogames vs. Everi Holdings |
| Esports Entertainment vs. Rush Street Interactive | Esports Entertainment vs. Everi Holdings | Esports Entertainment vs. Inspired Entertainment | Esports Entertainment vs. PointsBet Holdings Limited |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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