Correlation Between FEMALE HEALTH and PLAYTECH
Can any of the company-specific risk be diversified away by investing in both FEMALE HEALTH 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 FEMALE HEALTH and PLAYTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FEMALE HEALTH and PLAYTECH, you can compare the effects of market volatilities on FEMALE HEALTH 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 FEMALE HEALTH with a short position of PLAYTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEMALE HEALTH and PLAYTECH.
Diversification Opportunities for FEMALE HEALTH and PLAYTECH
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FEMALE and PLAYTECH is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding FEMALE HEALTH and PLAYTECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTECH and FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH i.e., FEMALE HEALTH and PLAYTECH go up and down completely randomly.
Pair Corralation between FEMALE HEALTH and PLAYTECH
Assuming the 90 days trading horizon FEMALE HEALTH is expected to generate 1.12 times less return on investment than PLAYTECH. In addition to that, FEMALE HEALTH is 5.76 times more volatile than PLAYTECH. It trades about 0.02 of its total potential returns per unit of risk. PLAYTECH is currently generating about 0.13 per unit of volatility. If you would invest 858.00 in PLAYTECH on September 2, 2024 and sell it today you would earn a total of 18.00 from holding PLAYTECH or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FEMALE HEALTH vs. PLAYTECH
Performance |
| Timeline |
| FEMALE HEALTH |
| PLAYTECH |
FEMALE HEALTH and PLAYTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FEMALE HEALTH and PLAYTECH
The main advantage of trading using opposite FEMALE HEALTH and PLAYTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEMALE HEALTH 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.| FEMALE HEALTH vs. SIVERS SEMICONDUCTORS AB | FEMALE HEALTH vs. Darden Restaurants | FEMALE HEALTH vs. Reliance Steel Aluminum | FEMALE HEALTH vs. Q2M Managementberatung AG |
| PLAYTECH vs. SIVERS SEMICONDUCTORS AB | PLAYTECH vs. Darden Restaurants | PLAYTECH vs. Reliance Steel Aluminum | PLAYTECH vs. Q2M Managementberatung AG |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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