Correlation Between PLAYTECH and X FAB
Can any of the company-specific risk be diversified away by investing in both PLAYTECH and X FAB 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 X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYTECH and X FAB Silicon Foundries, you can compare the effects of market volatilities on PLAYTECH and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYTECH and X FAB.
Diversification Opportunities for PLAYTECH and X FAB
Poor diversification
The 3 months correlation between PLAYTECH and XFB is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTECH and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of PLAYTECH i.e., PLAYTECH and X FAB go up and down completely randomly.
Pair Corralation between PLAYTECH and X FAB
Assuming the 90 days trading horizon PLAYTECH is expected to generate 0.85 times more return on investment than X FAB. However, PLAYTECH is 1.17 times less risky than X FAB. It trades about -0.02 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.19 per unit of risk. If you would invest 867.00 in PLAYTECH on January 15, 2025 and sell it today you would lose (20.00) from holding PLAYTECH or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
PLAYTECH vs. X FAB Silicon Foundries
Performance |
| Timeline |
| PLAYTECH |
| X FAB Silicon |
PLAYTECH and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYTECH and X FAB
The main advantage of trading using opposite PLAYTECH and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYTECH position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| PLAYTECH vs. EEDUCATION ALBERT AB | PLAYTECH vs. PARKEN Sport Entertainment | PLAYTECH vs. DEVRY EDUCATION GRP | PLAYTECH vs. DICKS Sporting Goods |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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