Correlation Between Playtech Plc and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Playtech Plc and Sealed Air 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 Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtech Plc and Sealed Air Corp, you can compare the effects of market volatilities on Playtech Plc and Sealed Air 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 Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtech Plc and Sealed Air.
Diversification Opportunities for Playtech Plc and Sealed Air
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Playtech and Sealed is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Playtech Plc and Sealed Air Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air Corp 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 Sealed Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sealed Air Corp has no effect on the direction of Playtech Plc i.e., Playtech Plc and Sealed Air go up and down completely randomly.
Pair Corralation between Playtech Plc and Sealed Air
Assuming the 90 days trading horizon Playtech Plc is expected to generate 1.06 times more return on investment than Sealed Air. However, Playtech Plc is 1.06 times more volatile than Sealed Air Corp. It trades about 0.11 of its potential returns per unit of risk. Sealed Air Corp is currently generating about 0.01 per unit of risk. If you would invest 42,900 in Playtech Plc on November 9, 2024 and sell it today you would earn a total of 31,400 from holding Playtech Plc or generate 73.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.36% |
| Values | Daily Returns |
Playtech Plc vs. Sealed Air Corp
Performance |
| Timeline |
| Playtech Plc |
| Sealed Air Corp |
Playtech Plc and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtech Plc and Sealed Air
The main advantage of trading using opposite Playtech Plc and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtech Plc position performs unexpectedly, Sealed Air 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 Sealed Air will offset losses from the drop in Sealed Air's long position.| Playtech Plc vs. AfriTin Mining | Playtech Plc vs. Air Products Chemicals | Playtech Plc vs. GreenX Metals | Playtech Plc vs. Fulcrum Metals PLC |
| Sealed Air vs. Batm Advanced Communications | Sealed Air vs. United Internet AG | Sealed Air vs. Alfa Financial Software | Sealed Air vs. Capital Drilling |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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