Correlation Between Playtech Plc and KENNAMETAL INC
Can any of the company-specific risk be diversified away by investing in both Playtech Plc and KENNAMETAL INC 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 KENNAMETAL INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtech plc and KENNAMETAL INC, you can compare the effects of market volatilities on Playtech Plc and KENNAMETAL INC 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 KENNAMETAL INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtech Plc and KENNAMETAL INC.
Diversification Opportunities for Playtech Plc and KENNAMETAL INC
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Playtech and KENNAMETAL is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Playtech plc and KENNAMETAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENNAMETAL INC 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 KENNAMETAL INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENNAMETAL INC has no effect on the direction of Playtech Plc i.e., Playtech Plc and KENNAMETAL INC go up and down completely randomly.
Pair Corralation between Playtech Plc and KENNAMETAL INC
Assuming the 90 days trading horizon Playtech plc is expected to generate 1.07 times more return on investment than KENNAMETAL INC. However, Playtech Plc is 1.07 times more volatile than KENNAMETAL INC. It trades about 0.14 of its potential returns per unit of risk. KENNAMETAL INC is currently generating about 0.07 per unit of risk. If you would invest 532.00 in Playtech plc on September 3, 2024 and sell it today you would earn a total of 333.00 from holding Playtech plc or generate 62.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtech plc vs. KENNAMETAL INC
Performance |
| Timeline |
| Playtech plc |
| KENNAMETAL INC |
Playtech Plc and KENNAMETAL INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtech Plc and KENNAMETAL INC
The main advantage of trading using opposite Playtech Plc and KENNAMETAL INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtech Plc position performs unexpectedly, KENNAMETAL INC 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 KENNAMETAL INC will offset losses from the drop in KENNAMETAL INC's long position.| Playtech Plc vs. ANTA SPORTS PRODUCT | Playtech Plc vs. LG Display Co | Playtech Plc vs. USWE SPORTS AB | Playtech Plc vs. TRAVEL LEISURE DL 01 |
| KENNAMETAL INC vs. TOTAL GABON | KENNAMETAL INC vs. Walgreens Boots Alliance | KENNAMETAL INC vs. Peak Resources Limited |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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