Correlation Between Playtech Plc and ANTA Sports

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

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

Diversification Opportunities for Playtech Plc and ANTA Sports

-0.28

Correlation Coefficient

Playtech Plc  ANTA Sports

Very good diversification

The 3 months correlation between Playtech and ANTA is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Playtech plc and ANTA Sports Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA Sports Products and Playtech Plc 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 Playtech plc are associated (or correlated) with ANTA Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA Sports Products has no effect on the direction of Playtech Plc i.e., Playtech Plc and ANTA Sports go up and down completely randomly.

Pair Corralation between Playtech Plc and ANTA Sports

Assuming the 90 days horizon Playtech plc is expected to generate 0.93 times more return on investment than ANTA Sports. However, Playtech plc is 1.08 times less risky than ANTA Sports. It trades about 0.05 of its potential returns per unit of risk. ANTA Sports Products is currently generating about 0.0 per unit of risk. If you would invest  590.00  in Playtech plc on September 18, 2024 and sell it today you would earn a total of  353.00  from holding Playtech plc or generate 59.83% return on investment over 90 days.

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

Playtech plc  vs.  ANTA Sports Products

Playtech plc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Playtech plc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Playtech Plc reported solid returns over the last few months and may actually be approaching a breakup point.

ANTA Sports Products

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ANTA Sports Products are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, ANTA Sports showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Playtech Plc and ANTA Sports

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

The idea behind Playtech plc and ANTA Sports Products 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.