Correlation Between Neogames and Everi Holdings

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

By analyzing existing cross correlation between Neogames SA and Everi Holdings, you can compare the effects of market volatilities on Neogames and Everi Holdings 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 Neogames with a short position of Everi Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neogames and Everi Holdings.

Diversification Opportunities for Neogames and Everi Holdings

0.83

Correlation Coefficient

Neogames  Everi Holdings

Very poor diversification

The 3 months correlation between Neogames and Everi is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Neogames SA and Everi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everi Holdings and Neogames 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 Neogames SA are associated (or correlated) with Everi Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everi Holdings has no effect on the direction of Neogames i.e., Neogames and Everi Holdings go up and down completely randomly.

Pair Corralation between Neogames and Everi Holdings

If you would invest  1,334  in Everi Holdings on September 21, 2024 and sell it today you would earn a total of  13.00  from holding Everi Holdings or generate 0.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	4.76%
Values	Daily Returns

Neogames SA  vs.  Everi Holdings

Neogames SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neogames SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Neogames is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Everi Holdings

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Everi Holdings are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Everi Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Neogames and Everi Holdings

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

The idea behind Neogames SA and Everi Holdings 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.