Correlation Between Evolution Gaming and Playtika Holding

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

Diversification Opportunities for Evolution Gaming and Playtika Holding

-0.26

Correlation Coefficient

Evolution Gaming  Playtika Holding

Very good diversification

The 3 months correlation between Evolution and Playtika is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and Playtika Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtika Holding 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 Playtika Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtika Holding Corp has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and Playtika Holding go up and down completely randomly.

Pair Corralation between Evolution Gaming and Playtika Holding

Assuming the 90 days horizon Evolution Gaming Group is expected to generate 0.87 times more return on investment than Playtika Holding. However, Evolution Gaming Group is 1.15 times less risky than Playtika Holding. It trades about -0.01 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about -0.01 per unit of risk. If you would invest  9,250  in Evolution Gaming Group on September 19, 2024 and sell it today you would lose (1,029) from holding Evolution Gaming Group or give up 11.12% of portfolio value over 90 days.

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

Evolution Gaming Group  vs.  Playtika Holding Corp

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.

Playtika Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Playtika Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Evolution Gaming and Playtika Holding

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

The idea behind Evolution Gaming Group and Playtika Holding 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.