Correlation Between Immobile and PLAYWAY SA

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

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

Diversification Opportunities for Immobile and PLAYWAY SA

-0.02

Correlation Coefficient

Immobile  PLAYWAY SA

Good diversification

The 3 months correlation between Immobile and PLAYWAY is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Immobile and PLAYWAY SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYWAY SA and Immobile 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 Immobile are associated (or correlated) with PLAYWAY SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYWAY SA has no effect on the direction of Immobile i.e., Immobile and PLAYWAY SA go up and down completely randomly.

Pair Corralation between Immobile and PLAYWAY SA

Assuming the 90 days trading horizon Immobile is expected to under-perform the PLAYWAY SA. In addition to that, Immobile is 1.6 times more volatile than PLAYWAY SA. It trades about -0.09 of its total potential returns per unit of risk. PLAYWAY SA is currently generating about -0.06 per unit of volatility. If you would invest  31,768  in PLAYWAY SA on September 29, 2024 and sell it today you would lose (4,268) from holding PLAYWAY SA or give up 13.43% of portfolio value over 90 days.

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

Immobile  vs.  PLAYWAY SA

Immobile

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Immobile are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Immobile is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

PLAYWAY SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PLAYWAY SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, PLAYWAY SA 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 Immobile and PLAYWAY SA

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

The idea behind Immobile and PLAYWAY 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.

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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.