Correlation Between Wendys and Evolution Gaming
Can any of the company-specific risk be diversified away by investing in both Wendys 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 Wendys and Evolution Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Wendys Co and Evolution Gaming Group, you can compare the effects of market volatilities on Wendys 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 Wendys with a short position of Evolution Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wendys and Evolution Gaming.
Diversification Opportunities for Wendys and Evolution Gaming
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wendys and Evolution is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding The Wendys Co and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming and Wendys 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 The Wendys Co 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 Wendys i.e., Wendys and Evolution Gaming go up and down completely randomly.
Pair Corralation between Wendys and Evolution Gaming
Considering the 90-day investment horizon The Wendys Co is expected to under-perform the Evolution Gaming. But the stock apears to be less risky and, when comparing its historical volatility, The Wendys Co is 1.42 times less risky than Evolution Gaming. The stock trades about -0.01 of its potential returns per unit of risk. The Evolution Gaming Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 10,073 in Evolution Gaming Group on September 3, 2024 and sell it today you would lose (1,318) from holding Evolution Gaming Group or give up 13.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Wendys Co vs. Evolution Gaming Group
Performance |
| Timeline |
| The Wendys |
| Evolution Gaming |
Wendys and Evolution Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wendys and Evolution Gaming
The main advantage of trading using opposite Wendys and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wendys 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.| Wendys vs. Highway Holdings Limited | Wendys vs. QCR Holdings | Wendys vs. Partner Communications | Wendys vs. Acumen Pharmaceuticals |
| Evolution Gaming vs. Everi Holdings | Evolution Gaming vs. Intema Solutions | Evolution Gaming vs. 888 Holdings | Evolution Gaming vs. Light Wonder |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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