Correlation Between Evolution Gaming and CITIGROUP

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

Diversification Opportunities for Evolution Gaming and CITIGROUP

0.33

Correlation Coefficient

Evolution Gaming  CITIGROUP

Weak diversification

The 3 months correlation between Evolution and CITIGROUP is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and CITIGROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP INC 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 CITIGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIGROUP INC has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and CITIGROUP go up and down completely randomly.

Pair Corralation between Evolution Gaming and CITIGROUP

Assuming the 90 days horizon Evolution Gaming Group is expected to under-perform the CITIGROUP. In addition to that, Evolution Gaming is 2.46 times more volatile than CITIGROUP INC. It trades about -0.09 of its total potential returns per unit of risk. CITIGROUP INC is currently generating about -0.12 per unit of volatility. If you would invest  9,554  in CITIGROUP INC on September 17, 2024 and sell it today you would lose (682.00) from holding CITIGROUP INC or give up 7.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Evolution Gaming Group  vs.  CITIGROUP INC

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.

CITIGROUP INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CITIGROUP INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for CITIGROUP INC investors.

Pair Trading with Evolution Gaming and CITIGROUP

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

The idea behind Evolution Gaming Group and CITIGROUP INC 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.