Correlation Between Global Ship and PLAYTECH
Can any of the company-specific risk be diversified away by investing in both Global Ship 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 Global Ship and PLAYTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Ship Lease and PLAYTECH, you can compare the effects of market volatilities on Global Ship 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 Global Ship with a short position of PLAYTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and PLAYTECH.
Diversification Opportunities for Global Ship and PLAYTECH
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and PLAYTECH is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and PLAYTECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTECH and Global Ship 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 Global Ship Lease 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 Global Ship i.e., Global Ship and PLAYTECH go up and down completely randomly.
Pair Corralation between Global Ship and PLAYTECH
Assuming the 90 days horizon Global Ship Lease is expected to under-perform the PLAYTECH. But the stock apears to be less risky and, when comparing its historical volatility, Global Ship Lease is 1.22 times less risky than PLAYTECH. The stock trades about -0.08 of its potential returns per unit of risk. The PLAYTECH is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 853.00 in PLAYTECH on November 6, 2024 and sell it today you would lose (1.00) from holding PLAYTECH or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. PLAYTECH
Performance |
| Timeline |
| Global Ship Lease |
| PLAYTECH |
Global Ship and PLAYTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and PLAYTECH
The main advantage of trading using opposite Global Ship and PLAYTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship 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.| Global Ship vs. Planet Fitness | Global Ship vs. CREO MEDICAL GRP | Global Ship vs. Merit Medical Systems | Global Ship vs. CVR Medical Corp |
| PLAYTECH vs. PREMIER FOODS | PLAYTECH vs. Air Lease | PLAYTECH vs. FIRST SHIP LEASE | PLAYTECH vs. GWILLI FOOD |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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