Correlation Between Esports Entertainment and Everi Holdings

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

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

Diversification Opportunities for Esports Entertainment and Everi Holdings

0.7

Correlation Coefficient

Esports Entertainment  Everi Holdings

Poor diversification

The 3 months correlation between Esports and Everi is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Esports Entertainment Group and Everi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everi Holdings and Esports Entertainment 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 Esports Entertainment Group 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 Esports Entertainment i.e., Esports Entertainment and Everi Holdings go up and down completely randomly.

Pair Corralation between Esports Entertainment and Everi Holdings

If you would invest  258.00  in Esports Entertainment Group on January 26, 2024 and sell it today you would earn a total of  0.00  from holding Esports Entertainment Group or generate 0.0% return on investment over 90 days.

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

Esports Entertainment Group  vs.  Everi Holdings

Esports Entertainment

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Esports Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite weak fundamental drivers, Esports Entertainment disclosed solid returns over the last few months and may actually be approaching a breakup point.

Everi Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Everi Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Esports Entertainment and Everi Holdings

The main advantage of trading using opposite Esports Entertainment and Everi Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esports Entertainment 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 Esports Entertainment Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.