Correlation Between Gambling and Everi Holdings

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

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

Diversification Opportunities for Gambling and Everi Holdings

0.75

Correlation Coefficient

Gambling  Everi Holdings

Poor diversification

The 3 months correlation between Gambling and Everi is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Gambling Group and Everi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everi Holdings and Gambling 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 Gambling Group are associated (or correlated) with Everi Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everi Holdings has no effect on the direction of Gambling i.e., Gambling and Everi Holdings go up and down completely randomly.

Pair Corralation between Gambling and Everi Holdings

Given the investment horizon of 90 days Gambling Group is expected to generate 23.58 times more return on investment than Everi Holdings. However, Gambling is 23.58 times more volatile than Everi Holdings. It trades about 0.19 of its potential returns per unit of risk. Everi Holdings is currently generating about 0.26 per unit of risk. If you would invest  982.00  in Gambling Group on September 21, 2024 and sell it today you would earn a total of  511.00  from holding Gambling Group or generate 52.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Gambling Group  vs.  Everi Holdings

Gambling Group

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gambling Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating primary indicators, Gambling sustained solid returns over the last few months and may actually be approaching a breakup point.

Everi Holdings

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Everi Holdings are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Everi Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Gambling and Everi Holdings

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

The idea behind Gambling Group and Everi Holdings 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.