Correlation Between FIH MOBILE and Playtech Plc
Can any of the company-specific risk be diversified away by investing in both FIH MOBILE 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 FIH MOBILE and Playtech Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIH MOBILE and Playtech plc, you can compare the effects of market volatilities on FIH MOBILE 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 FIH MOBILE with a short position of Playtech Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIH MOBILE and Playtech Plc.
Diversification Opportunities for FIH MOBILE and Playtech Plc
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FIH and Playtech is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding FIH MOBILE and Playtech plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtech plc and FIH MOBILE 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 FIH MOBILE 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 FIH MOBILE i.e., FIH MOBILE and Playtech Plc go up and down completely randomly.
Pair Corralation between FIH MOBILE and Playtech Plc
Assuming the 90 days trading horizon FIH MOBILE is expected to generate 1.75 times less return on investment than Playtech Plc. In addition to that, FIH MOBILE is 1.16 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 0.11 per unit of volatility. If you would invest 534.00 in Playtech plc on November 7, 2024 and sell it today you would earn a total of 336.00 from holding Playtech plc or generate 62.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIH MOBILE vs. Playtech plc
Performance |
| Timeline |
| FIH MOBILE |
| Playtech plc |
FIH MOBILE and Playtech Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIH MOBILE and Playtech Plc
The main advantage of trading using opposite FIH MOBILE and Playtech Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIH MOBILE 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.| FIH MOBILE vs. Columbia Sportswear | FIH MOBILE vs. FRACTAL GAMING GROUP | FIH MOBILE vs. LG Display Co | FIH MOBILE vs. PLAYTIKA HOLDING DL 01 |
| Playtech Plc vs. SALESFORCE INC CDR | Playtech Plc vs. UNIVERSAL MUSIC GROUP | Playtech Plc vs. UNIVMUSIC GRPADR050 | Playtech Plc vs. ANTA SPORTS PRODUCT |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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