Correlation Between PPHE HOTEL and Playtech Plc
Can any of the company-specific risk be diversified away by investing in both PPHE HOTEL and Playtech Plc 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 PPHE HOTEL and Playtech Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPHE HOTEL GROUP and Playtech plc, you can compare the effects of market volatilities on PPHE HOTEL and Playtech Plc 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 PPHE HOTEL with a short position of Playtech Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE HOTEL and Playtech Plc.
Diversification Opportunities for PPHE HOTEL and Playtech Plc
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PPHE and Playtech is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding PPHE HOTEL GROUP and Playtech plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtech plc and PPHE HOTEL 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 PPHE HOTEL GROUP are associated (or correlated) with Playtech Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtech plc has no effect on the direction of PPHE HOTEL i.e., PPHE HOTEL and Playtech Plc go up and down completely randomly.
Pair Corralation between PPHE HOTEL and Playtech Plc
Assuming the 90 days trading horizon PPHE HOTEL GROUP is expected to under-perform the Playtech Plc. In addition to that, PPHE HOTEL is 2.28 times more volatile than Playtech plc. It trades about -0.18 of its total potential returns per unit of risk. Playtech plc is currently generating about 0.11 per unit of volatility. If you would invest 844.00 in Playtech plc on October 28, 2024 and sell it today you would earn a total of 19.00 from holding Playtech plc or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPHE HOTEL GROUP vs. Playtech plc
Performance |
| Timeline |
| PPHE HOTEL GROUP |
| Playtech plc |
PPHE HOTEL and Playtech Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE HOTEL and Playtech Plc
The main advantage of trading using opposite PPHE HOTEL and Playtech Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE HOTEL position performs unexpectedly, Playtech Plc 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 Plc will offset losses from the drop in Playtech Plc's long position.| PPHE HOTEL vs. Boyd Gaming | PPHE HOTEL vs. CompuGroup Medical SE | PPHE HOTEL vs. Corsair Gaming | PPHE HOTEL vs. PLAYMATES TOYS |
| Playtech Plc vs. SALESFORCE INC CDR | Playtech Plc vs. Gaztransport Technigaz SA | Playtech Plc vs. TRADELINK ELECTRON | Playtech Plc vs. FAST RETAIL ADR |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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