Correlation Between Esprinet SpA and PLAYSTUDIOS

Can any of the company-specific risk be diversified away by investing in both Esprinet SpA and PLAYSTUDIOS 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 Esprinet SpA and PLAYSTUDIOS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Esprinet SpA and PLAYSTUDIOS A DL 0001, you can compare the effects of market volatilities on Esprinet SpA and PLAYSTUDIOS 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 Esprinet SpA with a short position of PLAYSTUDIOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esprinet SpA and PLAYSTUDIOS.

Diversification Opportunities for Esprinet SpA and PLAYSTUDIOS

-0.89

Correlation Coefficient

Esprinet SpA  PLAYSTUDIOS

Pay attention - limited upside

The 3 months correlation between Esprinet and PLAYSTUDIOS is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Esprinet SpA and PLAYSTUDIOS A DL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYSTUDIOS A DL and Esprinet SpA 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 Esprinet SpA are associated (or correlated) with PLAYSTUDIOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYSTUDIOS A DL has no effect on the direction of Esprinet SpA i.e., Esprinet SpA and PLAYSTUDIOS go up and down completely randomly.

Pair Corralation between Esprinet SpA and PLAYSTUDIOS

Assuming the 90 days trading horizon Esprinet SpA is expected to under-perform the PLAYSTUDIOS. But the stock apears to be less risky and, when comparing its historical volatility, Esprinet SpA is 1.54 times less risky than PLAYSTUDIOS. The stock trades about -0.19 of its potential returns per unit of risk. The PLAYSTUDIOS A DL 0001 is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  132.00  in PLAYSTUDIOS A DL 0001 on September 23, 2024 and sell it today you would earn a total of  52.00  from holding PLAYSTUDIOS A DL 0001 or generate 39.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Esprinet SpA  vs.  PLAYSTUDIOS A DL 0001

Esprinet SpA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Esprinet SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

PLAYSTUDIOS A DL

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PLAYSTUDIOS A DL 0001 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, PLAYSTUDIOS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Esprinet SpA and PLAYSTUDIOS

The main advantage of trading using opposite Esprinet SpA and PLAYSTUDIOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esprinet SpA position performs unexpectedly, PLAYSTUDIOS 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 PLAYSTUDIOS will offset losses from the drop in PLAYSTUDIOS's long position.

The idea behind Esprinet SpA and PLAYSTUDIOS A DL 0001 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.