Correlation Between Datalogic and Evolution Gaming

Can any of the company-specific risk be diversified away by investing in both Datalogic 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 Datalogic and Evolution Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Datalogic and Evolution Gaming Group, you can compare the effects of market volatilities on Datalogic 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 Datalogic with a short position of Evolution Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datalogic and Evolution Gaming.

Diversification Opportunities for Datalogic and Evolution Gaming

0.51

Correlation Coefficient

Datalogic  Evolution Gaming

Very weak diversification

The 3 months correlation between Datalogic and Evolution is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Datalogic and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming and Datalogic 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 Datalogic 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 Datalogic i.e., Datalogic and Evolution Gaming go up and down completely randomly.

Pair Corralation between Datalogic and Evolution Gaming

Assuming the 90 days trading horizon Datalogic is expected to under-perform the Evolution Gaming. But the stock apears to be less risky and, when comparing its historical volatility, Datalogic is 1.86 times less risky than Evolution Gaming. The stock trades about -0.22 of its potential returns per unit of risk. The Evolution Gaming Group is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  100,169  in Evolution Gaming Group on October 1, 2024 and sell it today you would lose (15,699) from holding Evolution Gaming Group or give up 15.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Datalogic  vs.  Evolution Gaming Group

Datalogic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Datalogic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Evolution Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evolution Gaming Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Datalogic and Evolution Gaming

The main advantage of trading using opposite Datalogic and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datalogic 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.

The idea behind Datalogic and Evolution Gaming Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.