Correlation Between GMS and Evolution Gaming

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

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

Diversification Opportunities for GMS and Evolution Gaming

-0.32

Correlation Coefficient

GMS  Evolution Gaming

Very good diversification

The 3 months correlation between GMS and Evolution is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming and GMS 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 GMS Inc 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 GMS i.e., GMS and Evolution Gaming go up and down completely randomly.

Pair Corralation between GMS and Evolution Gaming

Considering the 90-day investment horizon GMS is expected to generate 5.14 times less return on investment than Evolution Gaming. But when comparing it to its historical volatility, GMS Inc is 15.33 times less risky than Evolution Gaming. It trades about 0.07 of its potential returns per unit of risk. Evolution Gaming Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  7,904  in Evolution Gaming Group on July 7, 2025 and sell it today you would earn a total of  129.00  from holding Evolution Gaming Group or generate 1.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	69.23%
Values	Daily Returns

GMS Inc  vs.  Evolution Gaming Group

GMS Inc

Risk-Adjusted Performance

Mild

Over the last 90 days GMS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, GMS is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Evolution Gaming

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Gaming Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 GMS and Evolution Gaming

The main advantage of trading using opposite GMS and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS 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 GMS Inc 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 Stocks Directory module to find actively traded stocks across global markets.