Correlation Between Evolution Gaming and Liberty Media

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

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

Diversification Opportunities for Evolution Gaming and Liberty Media

-0.56

Correlation Coefficient

Evolution Gaming  Liberty Media

Excellent diversification

The 3 months correlation between Evolution and Liberty is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and Liberty Media Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media Corp and Evolution Gaming 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 Evolution Gaming Group are associated (or correlated) with Liberty Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Media Corp has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and Liberty Media go up and down completely randomly.

Pair Corralation between Evolution Gaming and Liberty Media

Assuming the 90 days trading horizon Evolution Gaming Group is expected to under-perform the Liberty Media. In addition to that, Evolution Gaming is 1.26 times more volatile than Liberty Media Corp. It trades about -0.07 of its total potential returns per unit of risk. Liberty Media Corp is currently generating about 0.11 per unit of volatility. If you would invest  5,748  in Liberty Media Corp on September 25, 2024 and sell it today you would earn a total of  2,797  from holding Liberty Media Corp or generate 48.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.21%
Values	Daily Returns

Evolution Gaming Group  vs.  Liberty Media Corp

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.

Liberty Media Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Liberty Media Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Liberty Media unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evolution Gaming and Liberty Media

The main advantage of trading using opposite Evolution Gaming and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming position performs unexpectedly, Liberty Media 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 Liberty Media will offset losses from the drop in Liberty Media's long position.

The idea behind Evolution Gaming Group and Liberty Media Corp 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.