Correlation Between PLAYTECH and Banpu PCL
Can any of the company-specific risk be diversified away by investing in both PLAYTECH and Banpu PCL 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 Banpu PCL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYTECH and Banpu PCL, you can compare the effects of market volatilities on PLAYTECH and Banpu PCL 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 Banpu PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYTECH and Banpu PCL.
Diversification Opportunities for PLAYTECH and Banpu PCL
Weak diversification
The 3 months correlation between PLAYTECH and Banpu is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTECH and Banpu PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banpu PCL 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 Banpu PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banpu PCL has no effect on the direction of PLAYTECH i.e., PLAYTECH and Banpu PCL go up and down completely randomly.
Pair Corralation between PLAYTECH and Banpu PCL
Assuming the 90 days trading horizon PLAYTECH is expected to under-perform the Banpu PCL. But the stock apears to be less risky and, when comparing its historical volatility, PLAYTECH is 2.99 times less risky than Banpu PCL. The stock trades about -0.24 of its potential returns per unit of risk. The Banpu PCL is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Banpu PCL on October 9, 2024 and sell it today you would earn a total of 0.00 from holding Banpu PCL or generate 0.0% 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. Banpu PCL
Performance |
| Timeline |
| PLAYTECH |
| Banpu PCL |
PLAYTECH and Banpu PCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYTECH and Banpu PCL
The main advantage of trading using opposite PLAYTECH and Banpu PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYTECH position performs unexpectedly, Banpu PCL 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 Banpu PCL will offset losses from the drop in Banpu PCL's long position.The idea behind PLAYTECH and Banpu PCL 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.| Banpu PCL vs. CHINA SHENHUA ENA | Banpu PCL vs. China Coal Energy | Banpu PCL vs. Yancoal Australia | Banpu PCL vs. CONSOL 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |