Correlation Between Playtech Plc and HCA Healthcare
Can any of the company-specific risk be diversified away by investing in both Playtech Plc and HCA Healthcare 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 HCA Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtech Plc and HCA Healthcare, you can compare the effects of market volatilities on Playtech Plc and HCA Healthcare 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 HCA Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtech Plc and HCA Healthcare.
Diversification Opportunities for Playtech Plc and HCA Healthcare
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Playtech and HCA is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Playtech Plc and HCA Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare 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 HCA Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCA Healthcare has no effect on the direction of Playtech Plc i.e., Playtech Plc and HCA Healthcare go up and down completely randomly.
Pair Corralation between Playtech Plc and HCA Healthcare
Assuming the 90 days trading horizon Playtech Plc is expected to generate 0.5 times more return on investment than HCA Healthcare. However, Playtech Plc is 2.01 times less risky than HCA Healthcare. It trades about -0.01 of its potential returns per unit of risk. HCA Healthcare is currently generating about -0.26 per unit of risk. If you would invest 72,600 in Playtech Plc on August 26, 2024 and sell it today you would lose (100.00) from holding Playtech Plc or give up 0.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtech Plc vs. HCA Healthcare
Performance |
| Timeline |
| Playtech Plc |
| HCA Healthcare |
Playtech Plc and HCA Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtech Plc and HCA Healthcare
The main advantage of trading using opposite Playtech Plc and HCA Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtech Plc position performs unexpectedly, HCA Healthcare 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 HCA Healthcare will offset losses from the drop in HCA Healthcare's long position.| Playtech Plc vs. UNIQA Insurance Group | Playtech Plc vs. Central Asia Metals | Playtech Plc vs. Vienna Insurance Group | Playtech Plc vs. Endeavour Mining Corp |
| HCA Healthcare vs. Samsung Electronics Co | HCA Healthcare vs. Samsung Electronics Co | HCA Healthcare vs. Hyundai Motor | HCA Healthcare vs. Toyota Motor Corp |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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