Correlation Between Playtech Plc and PT Global

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

By analyzing existing cross correlation between Playtech plc and PT Global Mediacom, you can compare the effects of market volatilities on Playtech Plc and PT Global 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 PT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtech Plc and PT Global.

Diversification Opportunities for Playtech Plc and PT Global

-0.29

Correlation Coefficient

Playtech Plc  PT Global

Very good diversification

The 3 months correlation between Playtech and 06L is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Playtech plc and PT Global Mediacom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Global Mediacom 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 PT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Global Mediacom has no effect on the direction of Playtech Plc i.e., Playtech Plc and PT Global go up and down completely randomly.

Pair Corralation between Playtech Plc and PT Global

Assuming the 90 days trading horizon Playtech plc is expected to generate 0.62 times more return on investment than PT Global. However, Playtech plc is 1.62 times less risky than PT Global. It trades about 0.16 of its potential returns per unit of risk. PT Global Mediacom is currently generating about -0.03 per unit of risk. If you would invest  754.00  in Playtech plc on August 31, 2024 and sell it today you would earn a total of  114.00  from holding Playtech plc or generate 15.12% return on investment over 90 days.

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

Playtech plc  vs.  PT Global Mediacom

Playtech plc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Playtech plc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Playtech Plc unveiled solid returns over the last few months and may actually be approaching a breakup point.

PT Global Mediacom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Global Mediacom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PT Global is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Playtech Plc and PT Global

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

The idea behind Playtech plc and PT Global Mediacom 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.