Correlation Between Playtech Plc and LIFENET INSURANCE
Can any of the company-specific risk be diversified away by investing in both Playtech Plc and LIFENET INSURANCE 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 LIFENET INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtech plc and LIFENET INSURANCE CO, you can compare the effects of market volatilities on Playtech Plc and LIFENET INSURANCE 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 LIFENET INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtech Plc and LIFENET INSURANCE.
Diversification Opportunities for Playtech Plc and LIFENET INSURANCE
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Playtech and LIFENET is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Playtech plc and LIFENET INSURANCE CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFENET INSURANCE 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 LIFENET INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFENET INSURANCE has no effect on the direction of Playtech Plc i.e., Playtech Plc and LIFENET INSURANCE go up and down completely randomly.
Pair Corralation between Playtech Plc and LIFENET INSURANCE
Assuming the 90 days trading horizon Playtech plc is expected to under-perform the LIFENET INSURANCE. But the stock apears to be less risky and, when comparing its historical volatility, Playtech plc is 1.99 times less risky than LIFENET INSURANCE. The stock trades about 0.0 of its potential returns per unit of risk. The LIFENET INSURANCE CO is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,160 in LIFENET INSURANCE CO on August 31, 2024 and sell it today you would earn a total of 20.00 from holding LIFENET INSURANCE CO or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtech plc vs. LIFENET INSURANCE CO
Performance |
| Timeline |
| Playtech plc |
| LIFENET INSURANCE |
Playtech Plc and LIFENET INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtech Plc and LIFENET INSURANCE
The main advantage of trading using opposite Playtech Plc and LIFENET INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtech Plc position performs unexpectedly, LIFENET INSURANCE 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 LIFENET INSURANCE will offset losses from the drop in LIFENET INSURANCE's long position.| Playtech Plc vs. MAVEN WIRELESS SWEDEN | Playtech Plc vs. Tri Pointe Homes | Playtech Plc vs. Gol Intelligent Airlines | Playtech Plc vs. American Airlines Group |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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