Correlation Between Thor Mining and Evolution Gaming

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

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

Diversification Opportunities for Thor Mining and Evolution Gaming

0.71

Correlation Coefficient

Thor Mining  Evolution Gaming

Poor diversification

The 3 months correlation between Thor and Evolution is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Thor Mining PLC and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming and Thor Mining 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 Thor Mining PLC 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 Thor Mining i.e., Thor Mining and Evolution Gaming go up and down completely randomly.

Pair Corralation between Thor Mining and Evolution Gaming

Assuming the 90 days trading horizon Thor Mining PLC is expected to under-perform the Evolution Gaming. In addition to that, Thor Mining is 2.48 times more volatile than Evolution Gaming Group. It trades about -0.04 of its total potential returns per unit of risk. Evolution Gaming Group is currently generating about -0.02 per unit of volatility. If you would invest  112,240  in Evolution Gaming Group on October 10, 2024 and sell it today you would lose (24,410) from holding Evolution Gaming Group or give up 21.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.6%
Values	Daily Returns

Thor Mining PLC  vs.  Evolution Gaming Group

Thor Mining PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thor Mining PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Thor Mining is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 weak 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 Thor Mining and Evolution Gaming

The main advantage of trading using opposite Thor Mining and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Mining 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 Thor Mining PLC 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.