Correlation Between Playtech Plc and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Playtech Plc and Samsung Electronics 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 Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtech Plc and Samsung Electronics Co, you can compare the effects of market volatilities on Playtech Plc and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtech Plc and Samsung Electronics.
Diversification Opportunities for Playtech Plc and Samsung Electronics
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Playtech and Samsung is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Playtech Plc and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Playtech Plc i.e., Playtech Plc and Samsung Electronics go up and down completely randomly.
Pair Corralation between Playtech Plc and Samsung Electronics
Assuming the 90 days trading horizon Playtech Plc is expected to generate 1.22 times more return on investment than Samsung Electronics. However, Playtech Plc is 1.22 times more volatile than Samsung Electronics Co. It trades about 0.04 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.03 per unit of risk. If you would invest 54,500 in Playtech Plc on September 3, 2024 and sell it today you would earn a total of 17,200 from holding Playtech Plc or generate 31.56% 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. Samsung Electronics Co
Performance |
| Timeline |
| Playtech Plc |
| Samsung Electronics |
Playtech Plc and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtech Plc and Samsung Electronics
The main advantage of trading using opposite Playtech Plc and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtech Plc position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Playtech Plc vs. Fresenius Medical Care | Playtech Plc vs. Universal Music Group | Playtech Plc vs. Synthomer plc | Playtech Plc vs. Compal Electronics GDR |
| Samsung Electronics vs. Coeur Mining | Samsung Electronics vs. Zoom Video Communications | Samsung Electronics vs. mobilezone holding AG | Samsung Electronics vs. Thor Mining PLC |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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