Correlation Between Everi Holdings and United Parks

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

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

Diversification Opportunities for Everi Holdings and United Parks

-0.42

Correlation Coefficient

Everi Holdings  United Parks

Very good diversification

The 3 months correlation between Everi and United is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Everi Holdings and United Parks Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parks Resorts and Everi 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 Everi Holdings are associated (or correlated) with United Parks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parks Resorts has no effect on the direction of Everi Holdings i.e., Everi Holdings and United Parks go up and down completely randomly.

Pair Corralation between Everi Holdings and United Parks

Given the investment horizon of 90 days Everi Holdings is expected to generate 0.09 times more return on investment than United Parks. However, Everi Holdings is 11.43 times less risky than United Parks. It trades about 0.09 of its potential returns per unit of risk. United Parks Resorts is currently generating about -0.05 per unit of risk. If you would invest  1,352  in Everi Holdings on December 25, 2024 and sell it today you would earn a total of  14.00  from holding Everi Holdings or generate 1.04% return on investment over 90 days.

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

Everi Holdings  vs.  United Parks Resorts

Everi Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Everi Holdings are ranked lower than 6 (%) 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.

United Parks Resorts

Risk-Adjusted Performance

Very Weak

Over the last 90 days United Parks Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward-looking signals remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Everi Holdings and United Parks

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

The idea behind Everi Holdings and United Parks Resorts 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.