Correlation Between PLAYTECH and Media
Can any of the company-specific risk be diversified away by investing in both PLAYTECH and Media 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 PLAYTECH and Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYTECH and Media and Games, you can compare the effects of market volatilities on PLAYTECH and Media 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 PLAYTECH with a short position of Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYTECH and Media.
Diversification Opportunities for PLAYTECH and Media
Modest diversification
The 3 months correlation between PLAYTECH and Media is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTECH and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games and PLAYTECH 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 PLAYTECH are associated (or correlated) with Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of PLAYTECH i.e., PLAYTECH and Media go up and down completely randomly.
Pair Corralation between PLAYTECH and Media
Assuming the 90 days trading horizon PLAYTECH is expected to generate 2.3 times less return on investment than Media. But when comparing it to its historical volatility, PLAYTECH is 1.77 times less risky than Media. It trades about 0.03 of its potential returns per unit of risk. Media and Games is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 167.00 in Media and Games on October 14, 2024 and sell it today you would earn a total of 107.00 from holding Media and Games or generate 64.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYTECH vs. Media and Games
Performance |
| Timeline |
| PLAYTECH |
| Media and Games |
PLAYTECH and Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYTECH and Media
The main advantage of trading using opposite PLAYTECH and Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYTECH position performs unexpectedly, Media 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 Media will offset losses from the drop in Media's long position.| PLAYTECH vs. NTG Nordic Transport | PLAYTECH vs. PACIFIC ONLINE | PLAYTECH vs. SOEDER SPORTFISKE AB | PLAYTECH vs. Air Transport Services |
| Media vs. CLEAN ENERGY FUELS | Media vs. PLAY2CHILL SA ZY | Media vs. PLAYTECH | Media vs. Carnegie Clean Energy |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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