Correlation Between Playtech Plc and Meiko Electronics
Can any of the company-specific risk be diversified away by investing in both Playtech Plc and Meiko Electronics 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 Meiko Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtech plc and Meiko Electronics Co, you can compare the effects of market volatilities on Playtech Plc and Meiko Electronics 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 Meiko Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtech Plc and Meiko Electronics.
Diversification Opportunities for Playtech Plc and Meiko Electronics
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Playtech and Meiko is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Playtech plc and Meiko Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiko Electronics 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 Meiko Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiko Electronics has no effect on the direction of Playtech Plc i.e., Playtech Plc and Meiko Electronics go up and down completely randomly.
Pair Corralation between Playtech Plc and Meiko Electronics
Assuming the 90 days trading horizon Playtech plc is expected to generate 0.53 times more return on investment than Meiko Electronics. However, Playtech plc is 1.89 times less risky than Meiko Electronics. It trades about 0.17 of its potential returns per unit of risk. Meiko Electronics Co is currently generating about -0.04 per unit of risk. If you would invest 842.00 in Playtech plc on November 7, 2024 and sell it today you would earn a total of 37.00 from holding Playtech plc or generate 4.39% 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. Meiko Electronics Co
Performance |
| Timeline |
| Playtech plc |
| Meiko Electronics |
Playtech Plc and Meiko Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtech Plc and Meiko Electronics
The main advantage of trading using opposite Playtech Plc and Meiko Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtech Plc position performs unexpectedly, Meiko Electronics 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 Meiko Electronics will offset losses from the drop in Meiko Electronics' long position.| Playtech Plc vs. SALESFORCE INC CDR | Playtech Plc vs. UNIVERSAL MUSIC GROUP | Playtech Plc vs. UNIVMUSIC GRPADR050 | Playtech Plc vs. ANTA SPORTS PRODUCT |
| Meiko Electronics vs. Mitsubishi Materials | Meiko Electronics vs. Cogent Communications Holdings | Meiko Electronics vs. Hyster Yale Materials Handling | Meiko Electronics vs. Materialise NV |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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