Correlation Between Evolution Gaming and Hawkins

Can any of the company-specific risk be diversified away by investing in both Evolution Gaming and Hawkins 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 Hawkins 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 Hawkins, you can compare the effects of market volatilities on Evolution Gaming and Hawkins 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 Hawkins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and Hawkins.

Diversification Opportunities for Evolution Gaming and Hawkins

0.2

Correlation Coefficient

Evolution Gaming  Hawkins

Modest diversification

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

Pair Corralation between Evolution Gaming and Hawkins

Assuming the 90 days horizon Evolution Gaming Group is expected to generate 0.84 times more return on investment than Hawkins. However, Evolution Gaming Group is 1.19 times less risky than Hawkins. It trades about 0.03 of its potential returns per unit of risk. Hawkins is currently generating about -0.09 per unit of risk. If you would invest  7,555  in Evolution Gaming Group on December 24, 2024 and sell it today you would earn a total of  221.00  from holding Evolution Gaming Group or generate 2.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Evolution Gaming Group  vs.  Hawkins

Evolution Gaming

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Gaming Group are ranked lower than 2 (%) 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.

Hawkins

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hawkins has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Evolution Gaming and Hawkins

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

The idea behind Evolution Gaming Group and Hawkins 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..