Correlation Between Ebet and Churchill Downs

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

By analyzing existing cross correlation between Ebet Inc and Churchill Downs Incorporated, you can compare the effects of market volatilities on Ebet and Churchill Downs 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 Ebet with a short position of Churchill Downs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebet and Churchill Downs.

Diversification Opportunities for Ebet and Churchill Downs

-0.33

Correlation Coefficient

Ebet  Churchill Downs

Very good diversification

The 3 months correlation between Ebet and Churchill is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ebet Inc and Churchill Downs Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Churchill Downs and Ebet 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 Ebet Inc are associated (or correlated) with Churchill Downs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Churchill Downs has no effect on the direction of Ebet i.e., Ebet and Churchill Downs go up and down completely randomly.

Pair Corralation between Ebet and Churchill Downs

If you would invest  9.33  in Ebet Inc on September 19, 2024 and sell it today you would earn a total of  0.00  from holding Ebet Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Ebet Inc  vs.  Churchill Downs Incorporated

Ebet Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ebet Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Ebet is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Churchill Downs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Churchill Downs Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Churchill Downs is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Ebet and Churchill Downs

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

The idea behind Ebet Inc and Churchill Downs Incorporated 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.