Correlation Between PLAYWAY SA and Enter Air

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

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

Diversification Opportunities for PLAYWAY SA and Enter Air

-0.09

Correlation Coefficient

PLAYWAY SA  Enter Air

Good diversification

The 3 months correlation between PLAYWAY and Enter is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding PLAYWAY SA and Enter Air SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enter Air SA and PLAYWAY SA 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 PLAYWAY SA are associated (or correlated) with Enter Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enter Air SA has no effect on the direction of PLAYWAY SA i.e., PLAYWAY SA and Enter Air go up and down completely randomly.

Pair Corralation between PLAYWAY SA and Enter Air

Assuming the 90 days trading horizon PLAYWAY SA is expected to under-perform the Enter Air. But the stock apears to be less risky and, when comparing its historical volatility, PLAYWAY SA is 1.01 times less risky than Enter Air. The stock trades about -0.01 of its potential returns per unit of risk. The Enter Air SA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  5,480  in Enter Air SA on December 31, 2024 and sell it today you would earn a total of  700.00  from holding Enter Air SA or generate 12.77% return on investment over 90 days.

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

PLAYWAY SA  vs.  Enter Air SA

PLAYWAY SA

Risk-Adjusted Performance

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.

Enter Air SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enter Air SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Enter Air reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PLAYWAY SA and Enter Air

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

The idea behind PLAYWAY SA and Enter Air 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.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.