Correlation Between Play2Chill and Komputronik

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Can any of the company-specific risk be diversified away by investing in both Play2Chill and Komputronik 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 Play2Chill and Komputronik into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Play2Chill SA and Komputronik SA, you can compare the effects of market volatilities on Play2Chill and Komputronik 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 Play2Chill with a short position of Komputronik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Play2Chill and Komputronik.

Diversification Opportunities for Play2Chill and Komputronik

-0.11
  Correlation Coefficient

Good diversification

The 3 months correlation between Play2Chill and Komputronik is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Play2Chill SA and Komputronik SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komputronik SA and Play2Chill 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 Play2Chill SA are associated (or correlated) with Komputronik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komputronik SA has no effect on the direction of Play2Chill i.e., Play2Chill and Komputronik go up and down completely randomly.

Pair Corralation between Play2Chill and Komputronik

Assuming the 90 days trading horizon Play2Chill SA is expected to generate 1.28 times more return on investment than Komputronik. However, Play2Chill is 1.28 times more volatile than Komputronik SA. It trades about 0.02 of its potential returns per unit of risk. Komputronik SA is currently generating about -0.01 per unit of risk. If you would invest  420.00  in Play2Chill SA on September 12, 2024 and sell it today you would earn a total of  10.00  from holding Play2Chill SA or generate 2.38% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy92.28%
ValuesDaily Returns

Play2Chill SA  vs.  Komputronik SA

 Performance 
       Timeline  
Play2Chill SA 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Play2Chill SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Play2Chill may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Komputronik SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Komputronik SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Komputronik is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Play2Chill and Komputronik Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Play2Chill and Komputronik

The main advantage of trading using opposite Play2Chill and Komputronik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Play2Chill position performs unexpectedly, Komputronik 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 Komputronik will offset losses from the drop in Komputronik's long position.
The idea behind Play2Chill SA and Komputronik 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.
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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