Correlation Between EMCOR and Evolution Gaming

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

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

Diversification Opportunities for EMCOR and Evolution Gaming

-0.24

Correlation Coefficient

EMCOR  Evolution Gaming

Very good diversification

The 3 months correlation between EMCOR and Evolution is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming and EMCOR 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 EMCOR Group 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 EMCOR i.e., EMCOR and Evolution Gaming go up and down completely randomly.

Pair Corralation between EMCOR and Evolution Gaming

Considering the 90-day investment horizon EMCOR Group is expected to under-perform the Evolution Gaming. In addition to that, EMCOR is 1.69 times more volatile than Evolution Gaming Group. It trades about -0.04 of its total potential returns per unit of risk. Evolution Gaming Group is currently generating about 0.05 per unit of volatility. If you would invest  7,592  in Evolution Gaming Group on December 26, 2024 and sell it today you would earn a total of  346.00  from holding Evolution Gaming Group or generate 4.56% return on investment over 90 days.

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

EMCOR Group  vs.  Evolution Gaming Group

EMCOR Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days EMCOR Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Evolution Gaming

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Gaming Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Evolution Gaming is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with EMCOR and Evolution Gaming

The main advantage of trading using opposite EMCOR and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMCOR 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 EMCOR Group 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 CEOs Directory module to screen CEOs from public companies around the world.