Correlation Between Jadestone Energy and Playtech Plc
Can any of the company-specific risk be diversified away by investing in both Jadestone Energy 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 Jadestone Energy and Playtech Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jadestone Energy and Playtech Plc, you can compare the effects of market volatilities on Jadestone Energy 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 Jadestone Energy with a short position of Playtech Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jadestone Energy and Playtech Plc.
Diversification Opportunities for Jadestone Energy and Playtech Plc
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jadestone and Playtech is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Jadestone Energy and Playtech Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtech Plc and Jadestone Energy 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 Jadestone Energy 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 Jadestone Energy i.e., Jadestone Energy and Playtech Plc go up and down completely randomly.
Pair Corralation between Jadestone Energy and Playtech Plc
Assuming the 90 days trading horizon Jadestone Energy is expected to generate 1.67 times more return on investment than Playtech Plc. However, Jadestone Energy is 1.67 times more volatile than Playtech Plc. It trades about 0.06 of its potential returns per unit of risk. Playtech Plc is currently generating about 0.09 per unit of risk. If you would invest 2,450 in Jadestone Energy on September 14, 2024 and sell it today you would earn a total of 50.00 from holding Jadestone Energy or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jadestone Energy vs. Playtech Plc
Performance |
| Timeline |
| Jadestone Energy |
| Playtech Plc |
Jadestone Energy and Playtech Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jadestone Energy and Playtech Plc
The main advantage of trading using opposite Jadestone Energy and Playtech Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jadestone Energy 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.| Jadestone Energy vs. LPKF Laser Electronics | Jadestone Energy vs. Infrastrutture Wireless Italiane | Jadestone Energy vs. Scandic Hotels Group | Jadestone Energy vs. Electronic Arts |
| Playtech Plc vs. Kinnevik Investment AB | Playtech Plc vs. Oakley Capital Investments | Playtech Plc vs. FC Investment Trust | Playtech Plc vs. United Utilities Group |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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