Correlation Between LIFENET INSURANCE and Playtech Plc
Can any of the company-specific risk be diversified away by investing in both LIFENET INSURANCE 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 LIFENET INSURANCE and Playtech Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFENET INSURANCE CO and Playtech plc, you can compare the effects of market volatilities on LIFENET INSURANCE 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 LIFENET INSURANCE with a short position of Playtech Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFENET INSURANCE and Playtech Plc.
Diversification Opportunities for LIFENET INSURANCE and Playtech Plc
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between LIFENET and Playtech is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding LIFENET INSURANCE CO and Playtech plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtech plc and LIFENET INSURANCE 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 LIFENET INSURANCE CO 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 LIFENET INSURANCE i.e., LIFENET INSURANCE and Playtech Plc go up and down completely randomly.
Pair Corralation between LIFENET INSURANCE and Playtech Plc
Assuming the 90 days horizon LIFENET INSURANCE CO is expected to generate 1.99 times more return on investment than Playtech Plc. However, LIFENET INSURANCE is 1.99 times more volatile than Playtech plc. It trades about 0.05 of its potential returns per unit of risk. Playtech plc is currently generating about 0.0 per unit of risk. If you would invest 1,160 in LIFENET INSURANCE CO on August 31, 2024 and sell it today you would earn a total of 20.00 from holding LIFENET INSURANCE CO or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFENET INSURANCE CO vs. Playtech plc
Performance |
| Timeline |
| LIFENET INSURANCE |
| Playtech plc |
LIFENET INSURANCE and Playtech Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFENET INSURANCE and Playtech Plc
The main advantage of trading using opposite LIFENET INSURANCE and Playtech Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFENET INSURANCE 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.| LIFENET INSURANCE vs. ONWARD MEDICAL BV | LIFENET INSURANCE vs. CHINA TONTINE WINES | LIFENET INSURANCE vs. ITALIAN WINE BRANDS | LIFENET INSURANCE vs. MELIA HOTELS |
| Playtech Plc vs. MAVEN WIRELESS SWEDEN | Playtech Plc vs. Tri Pointe Homes | Playtech Plc vs. Gol Intelligent Airlines | Playtech Plc vs. American Airlines Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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