Correlation Between Playtech Plc and Lendlease
Can any of the company-specific risk be diversified away by investing in both Playtech Plc and Lendlease 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 Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtech plc and Lendlease Group, you can compare the effects of market volatilities on Playtech Plc and Lendlease 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 Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtech Plc and Lendlease.
Diversification Opportunities for Playtech Plc and Lendlease
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Playtech and Lendlease is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Playtech plc and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group 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 Lendlease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendlease Group has no effect on the direction of Playtech Plc i.e., Playtech Plc and Lendlease go up and down completely randomly.
Pair Corralation between Playtech Plc and Lendlease
Assuming the 90 days trading horizon Playtech plc is expected to generate 0.86 times more return on investment than Lendlease. However, Playtech plc is 1.16 times less risky than Lendlease. It trades about 0.17 of its potential returns per unit of risk. Lendlease Group is currently generating about -0.03 per unit of risk. If you would invest 763.00 in Playtech plc on September 12, 2024 and sell it today you would earn a total of 111.00 from holding Playtech plc or generate 14.55% 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. Lendlease Group
Performance |
| Timeline |
| Playtech plc |
| Lendlease Group |
Playtech Plc and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtech Plc and Lendlease
The main advantage of trading using opposite Playtech Plc and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtech Plc position performs unexpectedly, Lendlease 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 Lendlease will offset losses from the drop in Lendlease's long position.| Playtech Plc vs. Tradeweb Markets | Playtech Plc vs. KRISPY KREME DL 01 | Playtech Plc vs. Verizon Communications | Playtech Plc vs. RETAIL FOOD GROUP |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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