Correlation Between Evolution Gaming and Mativ Holdings

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

Diversification Opportunities for Evolution Gaming and Mativ Holdings

0.77

Correlation Coefficient

Evolution Gaming  Mativ Holdings

Poor diversification

The 3 months correlation between Evolution and Mativ is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ Holdings 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 Mativ Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mativ Holdings has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and Mativ Holdings go up and down completely randomly.

Pair Corralation between Evolution Gaming and Mativ Holdings

Assuming the 90 days horizon Evolution Gaming Group is expected to generate 0.64 times more return on investment than Mativ Holdings. However, Evolution Gaming Group is 1.56 times less risky than Mativ Holdings. It trades about -0.09 of its potential returns per unit of risk. Mativ Holdings is currently generating about -0.16 per unit of risk. If you would invest  9,776  in Evolution Gaming Group on September 18, 2024 and sell it today you would lose (1,404) from holding Evolution Gaming Group or give up 14.36% of portfolio value over 90 days.

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

Evolution Gaming Group  vs.  Mativ Holdings

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 fragile 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.

Mativ Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mativ Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Evolution Gaming and Mativ Holdings

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

The idea behind Evolution Gaming Group and Mativ Holdings 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.