Correlation Between M Food and PLAYWAY SA
Can any of the company-specific risk be diversified away by investing in both M Food and PLAYWAY SA 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 M Food and PLAYWAY SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between M Food SA and PLAYWAY SA, you can compare the effects of market volatilities on M Food and PLAYWAY SA 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 M Food with a short position of PLAYWAY SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of M Food and PLAYWAY SA.
Diversification Opportunities for M Food and PLAYWAY SA
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MFD and PLAYWAY is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding M Food SA and PLAYWAY SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYWAY SA and M Food 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 M Food SA are associated (or correlated) with PLAYWAY SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYWAY SA has no effect on the direction of M Food i.e., M Food and PLAYWAY SA go up and down completely randomly.
Pair Corralation between M Food and PLAYWAY SA
Assuming the 90 days trading horizon M Food is expected to generate 2.36 times less return on investment than PLAYWAY SA. In addition to that, M Food is 3.55 times more volatile than PLAYWAY SA. It trades about 0.0 of its total potential returns per unit of risk. PLAYWAY SA is currently generating about 0.02 per unit of volatility. If you would invest 28,300 in PLAYWAY SA on September 12, 2024 and sell it today you would earn a total of 450.00 from holding PLAYWAY SA or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.9% |
| Values | Daily Returns |
M Food SA vs. PLAYWAY SA
Performance |
| Timeline |
| M Food SA |
| PLAYWAY SA |
M Food and PLAYWAY SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with M Food and PLAYWAY SA
The main advantage of trading using opposite M Food and PLAYWAY SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M Food position performs unexpectedly, PLAYWAY SA 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 PLAYWAY SA will offset losses from the drop in PLAYWAY SA's long position.The idea behind M Food SA and PLAYWAY SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| PLAYWAY SA vs. CD PROJEKT SA | PLAYWAY SA vs. 11 bit studios | PLAYWAY SA vs. TEN SQUARE GAMES | PLAYWAY SA vs. CI Games SA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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