Correlation Between Evolution Gaming and DigiAsia Corp

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

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

Diversification Opportunities for Evolution Gaming and DigiAsia Corp

-0.2

Correlation Coefficient

Evolution Gaming  DigiAsia Corp

Good diversification

The 3 months correlation between Evolution and DigiAsia is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and DigiAsia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigiAsia Corp and Evolution Gaming 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 Gaming Group are associated (or correlated) with DigiAsia Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigiAsia Corp has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and DigiAsia Corp go up and down completely randomly.

Pair Corralation between Evolution Gaming and DigiAsia Corp

Assuming the 90 days horizon Evolution Gaming Group is expected to generate 0.15 times more return on investment than DigiAsia Corp. However, Evolution Gaming Group is 6.71 times less risky than DigiAsia Corp. It trades about 0.04 of its potential returns per unit of risk. DigiAsia Corp is currently generating about -0.01 per unit of risk. If you would invest  7,503  in Evolution Gaming Group on December 23, 2024 and sell it today you would earn a total of  271.00  from holding Evolution Gaming Group or generate 3.61% return on investment over 90 days.

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

Evolution Gaming Group  vs.  DigiAsia Corp

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.

DigiAsia Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days DigiAsia Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators 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 Evolution Gaming and DigiAsia Corp

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

The idea behind Evolution Gaming Group and DigiAsia 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.