Correlation Between GOME Retail and PLAYTECH

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

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

Diversification Opportunities for GOME Retail and PLAYTECH

0.03

Correlation Coefficient

GOME Retail  PLAYTECH

Significant diversification

The 3 months correlation between GOME and PLAYTECH is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding GOME Retail Holdings and PLAYTECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTECH and GOME Retail 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 GOME Retail Holdings 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 GOME Retail i.e., GOME Retail and PLAYTECH go up and down completely randomly.

Pair Corralation between GOME Retail and PLAYTECH

If you would invest  845.00  in PLAYTECH on October 26, 2024 and sell it today you would earn a total of  23.00  from holding PLAYTECH or generate 2.72% return on investment over 90 days.

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

GOME Retail Holdings  vs.  PLAYTECH

GOME Retail Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GOME Retail Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, GOME Retail unveiled solid returns over the last few months and may actually be approaching a breakup point.

PLAYTECH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PLAYTECH has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, PLAYTECH is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with GOME Retail and PLAYTECH

The main advantage of trading using opposite GOME Retail and PLAYTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOME Retail 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 GOME Retail Holdings 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.