Correlation Between Playtech Plc and Hafnia
Can any of the company-specific risk be diversified away by investing in both Playtech Plc and Hafnia 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 Hafnia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtech plc and Hafnia Limited, you can compare the effects of market volatilities on Playtech Plc and Hafnia 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 Hafnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtech Plc and Hafnia.
Diversification Opportunities for Playtech Plc and Hafnia
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Playtech and Hafnia is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Playtech plc and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited 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 Hafnia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hafnia Limited has no effect on the direction of Playtech Plc i.e., Playtech Plc and Hafnia go up and down completely randomly.
Pair Corralation between Playtech Plc and Hafnia
Assuming the 90 days horizon Playtech plc is expected to generate 1.22 times more return on investment than Hafnia. However, Playtech Plc is 1.22 times more volatile than Hafnia Limited. It trades about 0.1 of its potential returns per unit of risk. Hafnia Limited is currently generating about -0.18 per unit of risk. If you would invest 815.00 in Playtech plc on August 31, 2024 and sell it today you would earn a total of 135.00 from holding Playtech plc or generate 16.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtech plc vs. Hafnia Limited
Performance |
| Timeline |
| Playtech plc |
| Hafnia Limited |
Playtech Plc and Hafnia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtech Plc and Hafnia
The main advantage of trading using opposite Playtech Plc and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtech Plc position performs unexpectedly, Hafnia 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 Hafnia will offset losses from the drop in Hafnia's long position.| Playtech Plc vs. Intema Solutions | Playtech Plc vs. 888 Holdings | Playtech Plc vs. Real Luck Group | Playtech Plc vs. Royal Wins |
| Hafnia vs. Comstock Holding Companies | Hafnia vs. SEI Investments | Hafnia vs. Chester Mining | Hafnia vs. Link Real Estate |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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