Correlation Between Bankers Investment and Playtech Plc
Can any of the company-specific risk be diversified away by investing in both Bankers Investment 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 Bankers Investment and Playtech Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bankers Investment Trust and Playtech Plc, you can compare the effects of market volatilities on Bankers Investment 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 Bankers Investment with a short position of Playtech Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankers Investment and Playtech Plc.
Diversification Opportunities for Bankers Investment and Playtech Plc
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bankers and Playtech is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Bankers Investment Trust and Playtech Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtech Plc and Bankers Investment 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 Bankers Investment Trust 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 Bankers Investment i.e., Bankers Investment and Playtech Plc go up and down completely randomly.
Pair Corralation between Bankers Investment and Playtech Plc
Assuming the 90 days trading horizon Bankers Investment is expected to generate 2.64 times less return on investment than Playtech Plc. But when comparing it to its historical volatility, Bankers Investment Trust is 2.18 times less risky than Playtech Plc. It trades about 0.07 of its potential returns per unit of risk. Playtech Plc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 72,600 in Playtech Plc on September 12, 2024 and sell it today you would earn a total of 1,300 from holding Playtech Plc or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bankers Investment Trust vs. Playtech Plc
Performance |
| Timeline |
| Bankers Investment Trust |
| Playtech Plc |
Bankers Investment and Playtech Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankers Investment and Playtech Plc
The main advantage of trading using opposite Bankers Investment and Playtech Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankers Investment 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.| Bankers Investment vs. Liberty Media Corp | Bankers Investment vs. Panther Metals PLC | Bankers Investment vs. Centaur Media | Bankers Investment vs. GoldMining |
| Playtech Plc vs. National Atomic Co | Playtech Plc vs. OTP Bank Nyrt | Playtech Plc vs. Samsung Electronics Co | Playtech Plc vs. Samsung Electronics Co |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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