Correlation Between Playtech Plc and Interpublic Group
Can any of the company-specific risk be diversified away by investing in both Playtech Plc and Interpublic Group 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 Interpublic Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtech plc and Interpublic Group of, you can compare the effects of market volatilities on Playtech Plc and Interpublic Group 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 Interpublic Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtech Plc and Interpublic Group.
Diversification Opportunities for Playtech Plc and Interpublic Group
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Playtech and Interpublic is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Playtech plc and Interpublic Group of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interpublic 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 Interpublic Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interpublic Group has no effect on the direction of Playtech Plc i.e., Playtech Plc and Interpublic Group go up and down completely randomly.
Pair Corralation between Playtech Plc and Interpublic Group
Assuming the 90 days horizon Playtech plc is expected to under-perform the Interpublic Group. In addition to that, Playtech Plc is 2.2 times more volatile than Interpublic Group of. It trades about -0.07 of its total potential returns per unit of risk. Interpublic Group of is currently generating about 0.12 per unit of volatility. If you would invest 2,813 in Interpublic Group of on November 2, 2024 and sell it today you would earn a total of 82.00 from holding Interpublic Group of or generate 2.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Playtech plc vs. Interpublic Group of
Performance |
| Timeline |
| Playtech plc |
| Interpublic Group |
Playtech Plc and Interpublic Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtech Plc and Interpublic Group
The main advantage of trading using opposite Playtech Plc and Interpublic Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtech Plc position performs unexpectedly, Interpublic Group 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 Interpublic Group will offset losses from the drop in Interpublic Group's long position.| Playtech Plc vs. EMCOR Group | Playtech Plc vs. The Gap, | Playtech Plc vs. Lithia Motors | Playtech Plc vs. Topbuild Corp |
| Interpublic Group vs. Ziff Davis | Interpublic Group vs. Criteo Sa | Interpublic Group vs. WPP PLC ADR | Interpublic Group vs. Integral Ad Science |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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