Correlation Between Playtech Plc and ING Groep
Can any of the company-specific risk be diversified away by investing in both Playtech Plc and ING Groep 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 ING Groep into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtech plc and ING Groep NV, you can compare the effects of market volatilities on Playtech Plc and ING Groep 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 ING Groep. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtech Plc and ING Groep.
Diversification Opportunities for Playtech Plc and ING Groep
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Playtech and ING is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Playtech plc and ING Groep NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ING Groep NV 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 ING Groep. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ING Groep NV has no effect on the direction of Playtech Plc i.e., Playtech Plc and ING Groep go up and down completely randomly.
Pair Corralation between Playtech Plc and ING Groep
Assuming the 90 days trading horizon Playtech plc is expected to generate 0.9 times more return on investment than ING Groep. However, Playtech plc is 1.11 times less risky than ING Groep. It trades about -0.07 of its potential returns per unit of risk. ING Groep NV is currently generating about -0.31 per unit of risk. If you would invest 872.00 in Playtech plc on August 29, 2024 and sell it today you would lose (15.00) from holding Playtech plc or give up 1.72% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Playtech plc vs. ING Groep NV
Performance |
Timeline |
Playtech plc |
ING Groep NV |
Playtech Plc and ING Groep Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Playtech Plc and ING Groep
The main advantage of trading using opposite Playtech Plc and ING Groep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtech Plc position performs unexpectedly, ING Groep 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 ING Groep will offset losses from the drop in ING Groep's long position.Playtech Plc vs. Take Two Interactive Software | Playtech Plc vs. Commercial Vehicle Group | Playtech Plc vs. Perseus Mining Limited | Playtech Plc vs. MAGIC SOFTWARE ENTR |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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