Correlation Between AGF Management and Playtech Plc
Can any of the company-specific risk be diversified away by investing in both AGF Management 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 AGF Management and Playtech Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGF Management Limited and Playtech plc, you can compare the effects of market volatilities on AGF Management 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 AGF Management with a short position of Playtech Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and Playtech Plc.
Diversification Opportunities for AGF Management and Playtech Plc
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AGF and Playtech is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Playtech plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtech plc and AGF Management 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 AGF Management Limited 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 AGF Management i.e., AGF Management and Playtech Plc go up and down completely randomly.
Pair Corralation between AGF Management and Playtech Plc
Assuming the 90 days horizon AGF Management is expected to generate 1.12 times less return on investment than Playtech Plc. In addition to that, AGF Management is 1.94 times more volatile than Playtech plc. It trades about 0.05 of its total potential returns per unit of risk. Playtech plc is currently generating about 0.12 per unit of volatility. If you would invest 845.00 in Playtech plc on November 27, 2024 and sell it today you would earn a total of 23.00 from holding Playtech plc or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGF Management Limited vs. Playtech plc
Performance |
| Timeline |
| AGF Management |
| Playtech plc |
AGF Management and Playtech Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and Playtech Plc
The main advantage of trading using opposite AGF Management and Playtech Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management 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.| AGF Management vs. Stag Industrial | AGF Management vs. X FAB Silicon Foundries | AGF Management vs. Kingdee International Software | AGF Management vs. Check Point Software |
| Playtech Plc vs. Apple Inc | Playtech Plc vs. Apple Inc | Playtech Plc vs. Apple Inc | Playtech Plc vs. Apple Inc |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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