Correlation Between PLAYWAY SA and Globe Trade
Can any of the company-specific risk be diversified away by investing in both PLAYWAY SA and Globe Trade 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 PLAYWAY SA and Globe Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYWAY SA and Globe Trade Centre, you can compare the effects of market volatilities on PLAYWAY SA and Globe Trade 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 PLAYWAY SA with a short position of Globe Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYWAY SA and Globe Trade.
Diversification Opportunities for PLAYWAY SA and Globe Trade
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PLAYWAY and Globe is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PLAYWAY SA and Globe Trade Centre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Trade Centre and PLAYWAY SA 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 PLAYWAY SA are associated (or correlated) with Globe Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Trade Centre has no effect on the direction of PLAYWAY SA i.e., PLAYWAY SA and Globe Trade go up and down completely randomly.
Pair Corralation between PLAYWAY SA and Globe Trade
Assuming the 90 days trading horizon PLAYWAY SA is expected to generate 0.79 times more return on investment than Globe Trade. However, PLAYWAY SA is 1.26 times less risky than Globe Trade. It trades about 0.0 of its potential returns per unit of risk. Globe Trade Centre is currently generating about -0.01 per unit of risk. If you would invest 30,644 in PLAYWAY SA on September 2, 2024 and sell it today you would lose (2,994) from holding PLAYWAY SA or give up 9.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYWAY SA vs. Globe Trade Centre
Performance |
| Timeline |
| PLAYWAY SA |
| Globe Trade Centre |
PLAYWAY SA and Globe Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYWAY SA and Globe Trade
The main advantage of trading using opposite PLAYWAY SA and Globe Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYWAY SA position performs unexpectedly, Globe Trade 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 Globe Trade will offset losses from the drop in Globe Trade's long position.The idea behind PLAYWAY SA and Globe Trade Centre pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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