Correlation Between Ocean Harvest and Playtech Plc

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

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

Diversification Opportunities for Ocean Harvest and Playtech Plc

0.22

Correlation Coefficient

Ocean Harvest  Playtech Plc

Modest diversification

The 3 months correlation between Ocean and Playtech is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Harvest Technology and Playtech Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtech Plc and Ocean Harvest 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 Ocean Harvest Technology are associated (or correlated) with Playtech Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtech Plc has no effect on the direction of Ocean Harvest i.e., Ocean Harvest and Playtech Plc go up and down completely randomly.

Pair Corralation between Ocean Harvest and Playtech Plc

Assuming the 90 days trading horizon Ocean Harvest Technology is expected to under-perform the Playtech Plc. In addition to that, Ocean Harvest is 1.66 times more volatile than Playtech Plc. It trades about -0.03 of its total potential returns per unit of risk. Playtech Plc is currently generating about 0.05 per unit of volatility. If you would invest  50,800  in Playtech Plc on September 17, 2024 and sell it today you would earn a total of  23,000  from holding Playtech Plc or generate 45.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	86.37%
Values	Daily Returns

Ocean Harvest Technology  vs.  Playtech Plc

Ocean Harvest Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ocean Harvest Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Playtech Plc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Playtech Plc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Playtech Plc is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ocean Harvest and Playtech Plc

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

The idea behind Ocean Harvest Technology and Playtech Plc 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.