Correlation Between Playtech Plc and PPHE HOTEL
Can any of the company-specific risk be diversified away by investing in both Playtech Plc and PPHE HOTEL 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 Plc and PPHE HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtech plc and PPHE HOTEL GROUP, you can compare the effects of market volatilities on Playtech Plc and PPHE HOTEL 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 Plc with a short position of PPHE HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtech Plc and PPHE HOTEL.
Diversification Opportunities for Playtech Plc and PPHE HOTEL
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Playtech and PPHE is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Playtech plc and PPHE HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE HOTEL GROUP and Playtech Plc 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 plc are associated (or correlated) with PPHE HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE HOTEL GROUP has no effect on the direction of Playtech Plc i.e., Playtech Plc and PPHE HOTEL go up and down completely randomly.
Pair Corralation between Playtech Plc and PPHE HOTEL
Assuming the 90 days trading horizon Playtech plc is expected to generate 0.44 times more return on investment than PPHE HOTEL. However, Playtech plc is 2.28 times less risky than PPHE HOTEL. It trades about 0.11 of its potential returns per unit of risk. PPHE HOTEL GROUP is currently generating about -0.18 per unit of risk. If you would invest 844.00 in Playtech plc on October 28, 2024 and sell it today you would earn a total of 19.00 from holding Playtech plc or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtech plc vs. PPHE HOTEL GROUP
Performance |
| Timeline |
| Playtech plc |
| PPHE HOTEL GROUP |
Playtech Plc and PPHE HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtech Plc and PPHE HOTEL
The main advantage of trading using opposite Playtech Plc and PPHE HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtech Plc position performs unexpectedly, PPHE HOTEL 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 PPHE HOTEL will offset losses from the drop in PPHE HOTEL's long position.| Playtech Plc vs. SALESFORCE INC CDR | Playtech Plc vs. Gaztransport Technigaz SA | Playtech Plc vs. TRADELINK ELECTRON | Playtech Plc vs. FAST RETAIL ADR |
| PPHE HOTEL vs. Boyd Gaming | PPHE HOTEL vs. CompuGroup Medical SE | PPHE HOTEL vs. Corsair Gaming | PPHE HOTEL vs. PLAYMATES TOYS |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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