Correlation Between Mosaic and Evolution Gaming

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

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

Diversification Opportunities for Mosaic and Evolution Gaming

-0.12

Correlation Coefficient

Mosaic  Evolution Gaming

Good diversification

The 3 months correlation between Mosaic and Evolution is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding The Mosaic and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming and Mosaic 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 The Mosaic 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 Mosaic i.e., Mosaic and Evolution Gaming go up and down completely randomly.

Pair Corralation between Mosaic and Evolution Gaming

Considering the 90-day investment horizon The Mosaic is expected to generate 1.11 times more return on investment than Evolution Gaming. However, Mosaic is 1.11 times more volatile than Evolution Gaming Group. It trades about 0.11 of its potential returns per unit of risk. Evolution Gaming Group is currently generating about 0.01 per unit of risk. If you would invest  2,378  in The Mosaic on December 29, 2024 and sell it today you would earn a total of  370.00  from holding The Mosaic or generate 15.56% return on investment over 90 days.

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

The Mosaic  vs.  Evolution Gaming Group

Mosaic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Mosaic are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Mosaic unveiled solid returns over the last few months and may actually be approaching a breakup point.

Evolution Gaming

Risk-Adjusted Performance

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 fairly strong basic indicators, Evolution Gaming is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mosaic and Evolution Gaming

The main advantage of trading using opposite Mosaic and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mosaic 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 The Mosaic 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.