Correlation Between ZhongAn Online and PLAYTECH
Can any of the company-specific risk be diversified away by investing in both ZhongAn Online and PLAYTECH 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 ZhongAn Online and PLAYTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZhongAn Online P and PLAYTECH, you can compare the effects of market volatilities on ZhongAn Online and PLAYTECH 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 ZhongAn Online with a short position of PLAYTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZhongAn Online and PLAYTECH.
Diversification Opportunities for ZhongAn Online and PLAYTECH
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ZhongAn and PLAYTECH is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding ZhongAn Online P and PLAYTECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTECH and ZhongAn Online 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 ZhongAn Online P are associated (or correlated) with PLAYTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYTECH has no effect on the direction of ZhongAn Online i.e., ZhongAn Online and PLAYTECH go up and down completely randomly.
Pair Corralation between ZhongAn Online and PLAYTECH
Assuming the 90 days trading horizon ZhongAn Online P is expected to under-perform the PLAYTECH. In addition to that, ZhongAn Online is 1.92 times more volatile than PLAYTECH. It trades about -0.55 of its total potential returns per unit of risk. PLAYTECH is currently generating about -0.3 per unit of volatility. If you would invest 892.00 in PLAYTECH on October 10, 2024 and sell it today you would lose (52.00) from holding PLAYTECH or give up 5.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZhongAn Online P vs. PLAYTECH
Performance |
| Timeline |
| ZhongAn Online P |
| PLAYTECH |
ZhongAn Online and PLAYTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZhongAn Online and PLAYTECH
The main advantage of trading using opposite ZhongAn Online and PLAYTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZhongAn Online position performs unexpectedly, PLAYTECH 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 PLAYTECH will offset losses from the drop in PLAYTECH's long position.| ZhongAn Online vs. North American Construction | ZhongAn Online vs. Align Technology | ZhongAn Online vs. GRUPO CARSO A1 | ZhongAn Online vs. FANDIFI TECHNOLOGY P |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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