Correlation Between Evolution Gaming and Juniata Valley

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

Diversification Opportunities for Evolution Gaming and Juniata Valley

-0.65

Correlation Coefficient

Evolution Gaming  Juniata Valley

Excellent diversification

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

Pair Corralation between Evolution Gaming and Juniata Valley

Assuming the 90 days horizon Evolution Gaming Group is expected to under-perform the Juniata Valley. But the pink sheet apears to be less risky and, when comparing its historical volatility, Evolution Gaming Group is 2.39 times less risky than Juniata Valley. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Juniata Valley Financial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,417  in Juniata Valley Financial on September 17, 2024 and sell it today you would lose (144.00) from holding Juniata Valley Financial or give up 10.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	88.57%
Values	Daily Returns

Evolution Gaming Group  vs.  Juniata Valley Financial

Evolution Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evolution Gaming Group 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 fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Juniata Valley Financial

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Juniata Valley Financial are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Juniata Valley is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Evolution Gaming and Juniata Valley

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

The idea behind Evolution Gaming Group and Juniata Valley Financial 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.