Correlation Between Evolution and Kambi Group

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

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

Diversification Opportunities for Evolution and Kambi Group

-0.65

Correlation Coefficient

Evolution  Kambi Group

Excellent diversification

The 3 months correlation between Evolution and Kambi is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Evolution AB and Kambi Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kambi Group PLC and Evolution 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 Evolution AB are associated (or correlated) with Kambi Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kambi Group PLC has no effect on the direction of Evolution i.e., Evolution and Kambi Group go up and down completely randomly.

Pair Corralation between Evolution and Kambi Group

Assuming the 90 days trading horizon Evolution AB is expected to under-perform the Kambi Group. But the stock apears to be less risky and, when comparing its historical volatility, Evolution AB is 1.03 times less risky than Kambi Group. The stock trades about -0.09 of its potential returns per unit of risk. The Kambi Group PLC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  10,230  in Kambi Group PLC on December 1, 2024 and sell it today you would earn a total of  300.00  from holding Kambi Group PLC or generate 2.93% return on investment over 90 days.

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

Evolution AB  vs.  Kambi Group PLC

Evolution AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evolution AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Kambi Group PLC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kambi Group PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Kambi Group is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Evolution and Kambi Group

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

The idea behind Evolution AB and Kambi Group PLC 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.

Check out your portfolio center.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.