Correlation Between Playtech Plc and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both Playtech Plc and Synchrony Financial 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 Synchrony Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtech plc and Synchrony Financial, you can compare the effects of market volatilities on Playtech Plc and Synchrony Financial 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 Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtech Plc and Synchrony Financial.
Diversification Opportunities for Playtech Plc and Synchrony Financial
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Playtech and Synchrony is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Playtech plc and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial 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 Synchrony Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synchrony Financial has no effect on the direction of Playtech Plc i.e., Playtech Plc and Synchrony Financial go up and down completely randomly.
Pair Corralation between Playtech Plc and Synchrony Financial
Assuming the 90 days trading horizon Playtech plc is expected to generate 0.65 times more return on investment than Synchrony Financial. However, Playtech plc is 1.53 times less risky than Synchrony Financial. It trades about 0.17 of its potential returns per unit of risk. Synchrony Financial is currently generating about -0.05 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtech plc vs. Synchrony Financial
Performance |
| Timeline |
| Playtech plc |
| Synchrony Financial |
Playtech Plc and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtech Plc and Synchrony Financial
The main advantage of trading using opposite Playtech Plc and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtech Plc position performs unexpectedly, Synchrony Financial 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 Synchrony Financial will offset losses from the drop in Synchrony Financial's 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 |
| Synchrony Financial vs. Warner Music Group | Synchrony Financial vs. UNIVMUSIC GRPADR050 | Synchrony Financial vs. HK Electric Investments | Synchrony Financial vs. MidCap Financial Investment |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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