Correlation Between 888 Holdings and Evolution Gaming

Can any of the company-specific risk be diversified away by investing in both 888 Holdings 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 888 Holdings and Evolution Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 888 Holdings and Evolution Gaming Group, you can compare the effects of market volatilities on 888 Holdings 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 888 Holdings with a short position of Evolution Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of 888 Holdings and Evolution Gaming.

Diversification Opportunities for 888 Holdings and Evolution Gaming

0.49

Correlation Coefficient

888 Holdings  Evolution Gaming

Very weak diversification

The 3 months correlation between 888 and Evolution is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding 888 Holdings and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming and 888 Holdings 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 888 Holdings 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 888 Holdings i.e., 888 Holdings and Evolution Gaming go up and down completely randomly.

Pair Corralation between 888 Holdings and Evolution Gaming

Assuming the 90 days horizon 888 Holdings is expected to under-perform the Evolution Gaming. In addition to that, 888 Holdings is 3.12 times more volatile than Evolution Gaming Group. It trades about -0.06 of its total potential returns per unit of risk. Evolution Gaming Group is currently generating about -0.17 per unit of volatility. If you would invest  9,506  in Evolution Gaming Group on August 30, 2024 and sell it today you would lose (457.00) from holding Evolution Gaming Group or give up 4.81% of portfolio value over 90 days.

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

888 Holdings  vs.  Evolution Gaming Group

888 Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 888 Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with 888 Holdings and Evolution Gaming

The main advantage of trading using opposite 888 Holdings and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 888 Holdings 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 888 Holdings 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.