Correlation Between Evolution Gaming and Osaka Steel

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

Diversification Opportunities for Evolution Gaming and Osaka Steel

-0.63

Correlation Coefficient

Evolution Gaming  Osaka Steel

Excellent diversification

The 3 months correlation between Evolution and Osaka is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and Osaka Steel Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osaka Steel Co, 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 Osaka Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osaka Steel Co, has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and Osaka Steel go up and down completely randomly.

Pair Corralation between Evolution Gaming and Osaka Steel

Assuming the 90 days horizon Evolution Gaming Group is expected to under-perform the Osaka Steel. In addition to that, Evolution Gaming is 19.29 times more volatile than Osaka Steel Co,. It trades about -0.09 of its total potential returns per unit of risk. Osaka Steel Co, is currently generating about 0.13 per unit of volatility. If you would invest  1,010  in Osaka Steel Co, on September 18, 2024 and sell it today you would earn a total of  10.00  from holding Osaka Steel Co, or generate 0.99% return on investment over 90 days.

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

Evolution Gaming Group  vs.  Osaka Steel Co,

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.

Osaka Steel Co,

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Osaka Steel Co, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Osaka Steel is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Evolution Gaming and Osaka Steel

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

The idea behind Evolution Gaming Group and Osaka Steel Co, 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.

Check out your portfolio center.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.