Correlation Between EPlay Digital and PLAYTECH

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

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

Diversification Opportunities for EPlay Digital and PLAYTECH

0.0

Correlation Coefficient

EPlay Digital  PLAYTECH

Pay attention - limited upside

The 3 months correlation between EPlay and PLAYTECH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ePlay Digital and PLAYTECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTECH and EPlay Digital 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 ePlay Digital are associated (or correlated) with PLAYTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYTECH has no effect on the direction of EPlay Digital i.e., EPlay Digital and PLAYTECH go up and down completely randomly.

Pair Corralation between EPlay Digital and PLAYTECH

If you would invest  852.00  in PLAYTECH on December 22, 2024 and sell it today you would earn a total of  34.00  from holding PLAYTECH or generate 3.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

ePlay Digital  vs.  PLAYTECH

ePlay Digital

Risk-Adjusted Performance

Very Weak

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

PLAYTECH

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PLAYTECH are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, PLAYTECH is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with EPlay Digital and PLAYTECH

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

The idea behind ePlay Digital and PLAYTECH 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.