Correlation Between ESGL Holdings and Ballys Corp

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

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

Diversification Opportunities for ESGL Holdings and Ballys Corp

0.34

Correlation Coefficient

ESGL Holdings  Ballys Corp

Weak diversification

The 3 months correlation between ESGL and Ballys is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding ESGL Holdings Limited and Ballys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballys Corp and ESGL 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 ESGL Holdings Limited are associated (or correlated) with Ballys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballys Corp has no effect on the direction of ESGL Holdings i.e., ESGL Holdings and Ballys Corp go up and down completely randomly.

Pair Corralation between ESGL Holdings and Ballys Corp

Assuming the 90 days horizon ESGL Holdings Limited is expected to generate 1.95 times more return on investment than Ballys Corp. However, ESGL Holdings is 1.95 times more volatile than Ballys Corp. It trades about 0.11 of its potential returns per unit of risk. Ballys Corp is currently generating about 0.02 per unit of risk. If you would invest  1.60  in ESGL Holdings Limited on December 20, 2024 and sell it today you would earn a total of  0.39  from holding ESGL Holdings Limited or generate 24.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	71.19%
Values	Daily Returns

ESGL Holdings Limited  vs.  Ballys Corp

ESGL Holdings Limited

Risk-Adjusted Performance

OK

Over the last 90 days ESGL Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak essential indicators, ESGL Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Ballys Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ballys Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent essential indicators, Ballys Corp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with ESGL Holdings and Ballys Corp

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

The idea behind ESGL Holdings Limited and Ballys 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.