Correlation Between Playtech Plc and Ming Le
Can any of the company-specific risk be diversified away by investing in both Playtech Plc and Ming Le 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 Ming Le into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtech plc and Ming Le Sports, you can compare the effects of market volatilities on Playtech Plc and Ming Le 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 Ming Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtech Plc and Ming Le.
Diversification Opportunities for Playtech Plc and Ming Le
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Playtech and Ming is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Playtech plc and Ming Le Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Le Sports 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 Ming Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Le Sports has no effect on the direction of Playtech Plc i.e., Playtech Plc and Ming Le go up and down completely randomly.
Pair Corralation between Playtech Plc and Ming Le
Assuming the 90 days trading horizon Playtech Plc is expected to generate 2.01 times less return on investment than Ming Le. But when comparing it to its historical volatility, Playtech plc is 3.1 times less risky than Ming Le. It trades about 0.16 of its potential returns per unit of risk. Ming Le Sports is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 109.00 in Ming Le Sports on August 31, 2024 and sell it today you would earn a total of 30.00 from holding Ming Le Sports or generate 27.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtech plc vs. Ming Le Sports
Performance |
| Timeline |
| Playtech plc |
| Ming Le Sports |
Playtech Plc and Ming Le Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtech Plc and Ming Le
The main advantage of trading using opposite Playtech Plc and Ming Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtech Plc position performs unexpectedly, Ming Le 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 Ming Le will offset losses from the drop in Ming Le's long position.| Playtech Plc vs. MAVEN WIRELESS SWEDEN | Playtech Plc vs. Tri Pointe Homes | Playtech Plc vs. Gol Intelligent Airlines | Playtech Plc vs. American Airlines 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |