Correlation Between Playtech Plc and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both Playtech Plc and Sabre Insurance 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 Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtech Plc and Sabre Insurance Group, you can compare the effects of market volatilities on Playtech Plc and Sabre Insurance 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 Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtech Plc and Sabre Insurance.
Diversification Opportunities for Playtech Plc and Sabre Insurance
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Playtech and Sabre is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Playtech Plc and Sabre Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre Insurance Group 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 Sabre Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre Insurance Group has no effect on the direction of Playtech Plc i.e., Playtech Plc and Sabre Insurance go up and down completely randomly.
Pair Corralation between Playtech Plc and Sabre Insurance
Assuming the 90 days trading horizon Playtech Plc is expected to generate 1.4 times more return on investment than Sabre Insurance. However, Playtech Plc is 1.4 times more volatile than Sabre Insurance Group. It trades about 0.16 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about -0.09 per unit of risk. If you would invest 48,000 in Playtech Plc on August 30, 2024 and sell it today you would earn a total of 25,300 from holding Playtech Plc or generate 52.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtech Plc vs. Sabre Insurance Group
Performance |
| Timeline |
| Playtech Plc |
| Sabre Insurance Group |
Playtech Plc and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtech Plc and Sabre Insurance
The main advantage of trading using opposite Playtech Plc and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtech Plc position performs unexpectedly, Sabre Insurance 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 Sabre Insurance will offset losses from the drop in Sabre Insurance's long position.| Playtech Plc vs. CVR Energy | Playtech Plc vs. Viridian Therapeutics | Playtech Plc vs. Nationwide Building Society | Playtech Plc vs. Dollar Tree |
| Sabre Insurance vs. Samsung Electronics Co | Sabre Insurance vs. Samsung Electronics Co | Sabre Insurance vs. Toyota Motor Corp | Sabre Insurance vs. Reliance Industries Ltd |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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