Correlation Between PLAYTECH and ATRESMEDIA
Can any of the company-specific risk be diversified away by investing in both PLAYTECH and ATRESMEDIA 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 ATRESMEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYTECH and ATRESMEDIA, you can compare the effects of market volatilities on PLAYTECH and ATRESMEDIA 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 ATRESMEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYTECH and ATRESMEDIA.
Diversification Opportunities for PLAYTECH and ATRESMEDIA
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PLAYTECH and ATRESMEDIA is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTECH and ATRESMEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRESMEDIA 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 ATRESMEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRESMEDIA has no effect on the direction of PLAYTECH i.e., PLAYTECH and ATRESMEDIA go up and down completely randomly.
Pair Corralation between PLAYTECH and ATRESMEDIA
Assuming the 90 days trading horizon PLAYTECH is expected to generate 1.16 times less return on investment than ATRESMEDIA. In addition to that, PLAYTECH is 1.67 times more volatile than ATRESMEDIA. It trades about 0.04 of its total potential returns per unit of risk. ATRESMEDIA is currently generating about 0.07 per unit of volatility. If you would invest 276.00 in ATRESMEDIA on October 26, 2024 and sell it today you would earn a total of 157.00 from holding ATRESMEDIA or generate 56.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYTECH vs. ATRESMEDIA
Performance |
| Timeline |
| PLAYTECH |
| ATRESMEDIA |
PLAYTECH and ATRESMEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYTECH and ATRESMEDIA
The main advantage of trading using opposite PLAYTECH and ATRESMEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYTECH position performs unexpectedly, ATRESMEDIA 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 ATRESMEDIA will offset losses from the drop in ATRESMEDIA's long position.The idea behind PLAYTECH and ATRESMEDIA 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.| ATRESMEDIA vs. AMAG Austria Metall | ATRESMEDIA vs. Nippon Light Metal | ATRESMEDIA vs. Cognizant Technology Solutions | ATRESMEDIA vs. Beta Systems Software |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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