Correlation Between JLEN Environmental and Evolution Gaming

Can any of the company-specific risk be diversified away by investing in both JLEN Environmental and Evolution Gaming 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 JLEN Environmental and Evolution Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JLEN Environmental Assets and Evolution Gaming Group, you can compare the effects of market volatilities on JLEN Environmental and Evolution Gaming 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 JLEN Environmental with a short position of Evolution Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and Evolution Gaming.

Diversification Opportunities for JLEN Environmental and Evolution Gaming

0.51

Correlation Coefficient

JLEN Environmental  Evolution Gaming

Very weak diversification

The 3 months correlation between JLEN and Evolution is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming and JLEN Environmental 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 JLEN Environmental Assets are associated (or correlated) with Evolution Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Gaming has no effect on the direction of JLEN Environmental i.e., JLEN Environmental and Evolution Gaming go up and down completely randomly.

Pair Corralation between JLEN Environmental and Evolution Gaming

Assuming the 90 days trading horizon JLEN Environmental Assets is expected to generate 0.83 times more return on investment than Evolution Gaming. However, JLEN Environmental Assets is 1.2 times less risky than Evolution Gaming. It trades about -0.2 of its potential returns per unit of risk. Evolution Gaming Group is currently generating about -0.27 per unit of risk. If you would invest  7,400  in JLEN Environmental Assets on September 24, 2024 and sell it today you would lose (390.00) from holding JLEN Environmental Assets or give up 5.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

JLEN Environmental Assets  vs.  Evolution Gaming Group

JLEN Environmental Assets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JLEN Environmental Assets has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with JLEN Environmental and Evolution Gaming

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

The idea behind JLEN Environmental Assets and Evolution Gaming Group 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 Stocks Directory module to find actively traded stocks across global markets.