Correlation Between Playtech Plc and Equinor ASA
Can any of the company-specific risk be diversified away by investing in both Playtech Plc and Equinor ASA 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 Equinor ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtech plc and Equinor ASA, you can compare the effects of market volatilities on Playtech Plc and Equinor ASA 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 Equinor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtech Plc and Equinor ASA.
Diversification Opportunities for Playtech Plc and Equinor ASA
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Playtech and Equinor is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Playtech plc and Equinor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinor ASA 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 Equinor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinor ASA has no effect on the direction of Playtech Plc i.e., Playtech Plc and Equinor ASA go up and down completely randomly.
Pair Corralation between Playtech Plc and Equinor ASA
Assuming the 90 days trading horizon Playtech plc is expected to under-perform the Equinor ASA. But the stock apears to be less risky and, when comparing its historical volatility, Playtech plc is 2.55 times less risky than Equinor ASA. The stock trades about -0.57 of its potential returns per unit of risk. The Equinor ASA is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 2,219 in Equinor ASA on October 14, 2024 and sell it today you would earn a total of 271.00 from holding Equinor ASA or generate 12.21% 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. Equinor ASA
Performance |
| Timeline |
| Playtech plc |
| Equinor ASA |
Playtech Plc and Equinor ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtech Plc and Equinor ASA
The main advantage of trading using opposite Playtech Plc and Equinor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtech Plc position performs unexpectedly, Equinor ASA 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 Equinor ASA will offset losses from the drop in Equinor ASA's long position.| Playtech Plc vs. PENN NATL GAMING | Playtech Plc vs. HOCHSCHILD MINING | Playtech Plc vs. Entravision Communications | Playtech Plc vs. ecotel communication ag |
| Equinor ASA vs. LG Display Co | Equinor ASA vs. Playtech plc | Equinor ASA vs. Harmony Gold Mining | Equinor ASA vs. Stag Industrial |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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