Correlation Between HOCHTIEF Aktiengesellscha and Evolution Gaming

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

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

Diversification Opportunities for HOCHTIEF Aktiengesellscha and Evolution Gaming

0.0

Correlation Coefficient

HOCHTIEF Aktiengesellscha  Evolution Gaming

Pay attention - limited upside

The 3 months correlation between HOCHTIEF and Evolution is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HOCHTIEF Aktiengesellschaft and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming and HOCHTIEF Aktiengesellscha 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 HOCHTIEF Aktiengesellschaft 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 HOCHTIEF Aktiengesellscha i.e., HOCHTIEF Aktiengesellscha and Evolution Gaming go up and down completely randomly.

Pair Corralation between HOCHTIEF Aktiengesellscha and Evolution Gaming

If you would invest (100.00) in HOCHTIEF Aktiengesellschaft on February 2, 2024 and sell it today you would earn a total of  100.00  from holding HOCHTIEF Aktiengesellschaft or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

HOCHTIEF Aktiengesellschaft  vs.  Evolution Gaming Group

HOCHTIEF Aktiengesellscha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HOCHTIEF Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, HOCHTIEF Aktiengesellscha is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 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 HOCHTIEF Aktiengesellscha and Evolution Gaming

The main advantage of trading using opposite HOCHTIEF Aktiengesellscha and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOCHTIEF Aktiengesellscha 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 HOCHTIEF Aktiengesellschaft 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..