Correlation Between Orix Corp and PLAYTECH

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

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

Diversification Opportunities for Orix Corp and PLAYTECH

-0.59

Correlation Coefficient

Orix Corp  PLAYTECH

Excellent diversification

The 3 months correlation between Orix and PLAYTECH is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Orix Corp Ads and PLAYTECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTECH and Orix Corp 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 Orix Corp Ads 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 Orix Corp i.e., Orix Corp and PLAYTECH go up and down completely randomly.

Pair Corralation between Orix Corp and PLAYTECH

Assuming the 90 days trading horizon Orix Corp Ads is expected to under-perform the PLAYTECH. But the stock apears to be less risky and, when comparing its historical volatility, Orix Corp Ads is 2.28 times less risky than PLAYTECH. The stock trades about -0.08 of its potential returns per unit of risk. The PLAYTECH is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  771.00  in PLAYTECH on August 31, 2024 and sell it today you would earn a total of  107.00  from holding PLAYTECH or generate 13.88% return on investment over 90 days.

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

Orix Corp Ads  vs.  PLAYTECH

Orix Corp Ads

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orix Corp Ads has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

PLAYTECH

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PLAYTECH are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, PLAYTECH exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Orix Corp and PLAYTECH

The main advantage of trading using opposite Orix Corp and PLAYTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orix Corp 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 Orix Corp Ads 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.