Correlation Between Playgon Games and Enghouse Systems
Can any of the company-specific risk be diversified away by investing in both Playgon Games and Enghouse Systems 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 Playgon Games and Enghouse Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playgon Games and Enghouse Systems, you can compare the effects of market volatilities on Playgon Games and Enghouse Systems 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 Playgon Games with a short position of Enghouse Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playgon Games and Enghouse Systems.
Diversification Opportunities for Playgon Games and Enghouse Systems
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Playgon and Enghouse is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Playgon Games and Enghouse Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enghouse Systems and Playgon Games 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 Playgon Games are associated (or correlated) with Enghouse Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enghouse Systems has no effect on the direction of Playgon Games i.e., Playgon Games and Enghouse Systems go up and down completely randomly.
Pair Corralation between Playgon Games and Enghouse Systems
Assuming the 90 days trading horizon Playgon Games is expected to generate 15.06 times more return on investment than Enghouse Systems. However, Playgon Games is 15.06 times more volatile than Enghouse Systems. It trades about 0.03 of its potential returns per unit of risk. Enghouse Systems is currently generating about 0.03 per unit of risk. If you would invest 3.00 in Playgon Games on September 12, 2024 and sell it today you would lose (2.00) from holding Playgon Games or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playgon Games vs. Enghouse Systems
Performance |
| Timeline |
| Playgon Games |
| Enghouse Systems |
Playgon Games and Enghouse Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playgon Games and Enghouse Systems
The main advantage of trading using opposite Playgon Games and Enghouse Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playgon Games position performs unexpectedly, Enghouse Systems 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 Enghouse Systems will offset losses from the drop in Enghouse Systems' long position.| Playgon Games vs. Apple Inc CDR | Playgon Games vs. NVIDIA CDR | Playgon Games vs. Microsoft Corp CDR | Playgon Games vs. Amazon CDR |
| Enghouse Systems vs. Kinaxis | Enghouse Systems vs. Open Text Corp | Enghouse Systems vs. Descartes Systems Group | Enghouse Systems vs. Constellation Software |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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