Correlation Between Bank Millennium and Play2Chill

Can any of the company-specific risk be diversified away by investing in both Bank Millennium and Play2Chill 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 Bank Millennium and Play2Chill into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bank Millennium SA and Play2Chill SA, you can compare the effects of market volatilities on Bank Millennium and Play2Chill 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 Bank Millennium with a short position of Play2Chill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Millennium and Play2Chill.

Diversification Opportunities for Bank Millennium and Play2Chill

0.03

Correlation Coefficient

Bank Millennium  Play2Chill

Significant diversification

The 3 months correlation between Bank and Play2Chill is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bank Millennium SA and Play2Chill SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Play2Chill SA and Bank Millennium 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 Bank Millennium SA are associated (or correlated) with Play2Chill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Play2Chill SA has no effect on the direction of Bank Millennium i.e., Bank Millennium and Play2Chill go up and down completely randomly.

Pair Corralation between Bank Millennium and Play2Chill

Assuming the 90 days trading horizon Bank Millennium SA is expected to generate 0.71 times more return on investment than Play2Chill. However, Bank Millennium SA is 1.4 times less risky than Play2Chill. It trades about 0.03 of its potential returns per unit of risk. Play2Chill SA is currently generating about 0.01 per unit of risk. If you would invest  852.00  in Bank Millennium SA on September 29, 2024 and sell it today you would earn a total of  20.00  from holding Bank Millennium SA or generate 2.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.33%
Values	Daily Returns

Bank Millennium SA  vs.  Play2Chill SA

Bank Millennium SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Millennium SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Bank Millennium is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Play2Chill SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Play2Chill SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Play2Chill is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bank Millennium and Play2Chill

The main advantage of trading using opposite Bank Millennium and Play2Chill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Millennium position performs unexpectedly, Play2Chill 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 Play2Chill will offset losses from the drop in Play2Chill's long position.

The idea behind Bank Millennium SA and Play2Chill SA 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.