diversifiable risk of combining Evolution Gaming and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution Gaming Group and NYSE Composite, you can compare the effects of market volatilities on Evolution Gaming and NYSE Composite 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 Evolution Gaming with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and NYSE Composite.
Diversification Opportunities for Evolution Gaming and NYSE Composite
Pair Corralation between Evolution Gaming and NYSE Composite
Assuming the 90 days horizon Evolution Gaming Group is expected to generate 2.59 times more return on investment than NYSE Composite. However, Evolution Gaming is 2.59 times more volatile than NYSE Composite. It trades about 0.03 of its potential returns per unit of risk. NYSE Composite is currently generating about 0.02 per unit of risk. If you would invest 9,762 in Evolution Gaming Group on November 24, 2023 and sell it today you would earn a total of 3,119 from holding Evolution Gaming Group or generate 31.95% return on investment over 90 days.
Evolution Gaming Group vs. NYSE Composite
Evolution Gaming and NYSE Composite Volatility Contrast
Pair Trading with Evolution Gaming and NYSE CompositeThe main advantage of trading using opposite Evolution Gaming and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position. The idea behind Evolution Gaming Group and NYSE Composite 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.
Check out your portfolio center.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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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