Correlation Between Playtech Plc and FIH MOBILE
Can any of the company-specific risk be diversified away by investing in both Playtech Plc and FIH MOBILE 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 FIH MOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtech plc and FIH MOBILE, you can compare the effects of market volatilities on Playtech Plc and FIH MOBILE 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 FIH MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtech Plc and FIH MOBILE.
Diversification Opportunities for Playtech Plc and FIH MOBILE
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Playtech and FIH is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Playtech plc and FIH MOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIH MOBILE 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 FIH MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIH MOBILE has no effect on the direction of Playtech Plc i.e., Playtech Plc and FIH MOBILE go up and down completely randomly.
Pair Corralation between Playtech Plc and FIH MOBILE
Assuming the 90 days trading horizon Playtech Plc is expected to generate 7.95 times less return on investment than FIH MOBILE. But when comparing it to its historical volatility, Playtech plc is 1.49 times less risky than FIH MOBILE. It trades about 0.03 of its potential returns per unit of risk. FIH MOBILE is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 10.00 in FIH MOBILE on October 31, 2024 and sell it today you would earn a total of 1.00 from holding FIH MOBILE or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtech plc vs. FIH MOBILE
Performance |
| Timeline |
| Playtech plc |
| FIH MOBILE |
Playtech Plc and FIH MOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtech Plc and FIH MOBILE
The main advantage of trading using opposite Playtech Plc and FIH MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtech Plc position performs unexpectedly, FIH MOBILE 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 FIH MOBILE will offset losses from the drop in FIH MOBILE's long position.| Playtech Plc vs. Apple Inc | Playtech Plc vs. Apple Inc | Playtech Plc vs. Apple Inc | Playtech Plc vs. Apple Inc |
| FIH MOBILE vs. Treasury Wine Estates | FIH MOBILE vs. 24SEVENOFFICE GROUP AB | FIH MOBILE vs. Penn National Gaming | FIH MOBILE vs. CONTAGIOUS GAMING INC |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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