Correlation Between Evolution Gaming and Contextlogic

Can any of the company-specific risk be diversified away by investing in both Evolution Gaming and Contextlogic 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 Evolution Gaming and Contextlogic 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 Contextlogic, you can compare the effects of market volatilities on Evolution Gaming and Contextlogic 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 Contextlogic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and Contextlogic.

Diversification Opportunities for Evolution Gaming and Contextlogic

0.56

Correlation Coefficient

Evolution Gaming  Contextlogic

Very weak diversification

The 3 months correlation between Evolution and Contextlogic is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and Contextlogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contextlogic and Evolution Gaming 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 Evolution Gaming Group are associated (or correlated) with Contextlogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contextlogic has no effect on the direction of Evolution Gaming i.e., Evolution Gaming and Contextlogic go up and down completely randomly.

Pair Corralation between Evolution Gaming and Contextlogic

Assuming the 90 days horizon Evolution Gaming Group is expected to generate 0.48 times more return on investment than Contextlogic. However, Evolution Gaming Group is 2.08 times less risky than Contextlogic. It trades about 0.18 of its potential returns per unit of risk. Contextlogic is currently generating about -0.03 per unit of risk. If you would invest  6,749  in Evolution Gaming Group on May 18, 2025 and sell it today you would earn a total of  1,831  from holding Evolution Gaming Group or generate 27.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	38.71%
Values	Daily Returns

Evolution Gaming Group  vs.  Contextlogic

Evolution Gaming

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Gaming Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Evolution Gaming showed solid returns over the last few months and may actually be approaching a breakup point.

Contextlogic

Risk-Adjusted Performance

Weakest

Over the last 90 days Contextlogic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Evolution Gaming and Contextlogic

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

The idea behind Evolution Gaming Group and Contextlogic 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.