Correlation Between Playtech Plc and BARRICK

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

By analyzing existing cross correlation between Playtech plc and BARRICK PD AUSTRALIA, you can compare the effects of market volatilities on Playtech Plc and BARRICK 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 BARRICK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtech Plc and BARRICK.

Diversification Opportunities for Playtech Plc and BARRICK

-0.73

Correlation Coefficient

Playtech Plc  BARRICK

Pay attention - limited upside

The 3 months correlation between Playtech and BARRICK is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Playtech plc and BARRICK PD AUSTRALIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BARRICK PD AUSTRALIA 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 BARRICK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BARRICK PD AUSTRALIA has no effect on the direction of Playtech Plc i.e., Playtech Plc and BARRICK go up and down completely randomly.

Pair Corralation between Playtech Plc and BARRICK

Assuming the 90 days horizon Playtech plc is expected to generate 4.3 times more return on investment than BARRICK. However, Playtech Plc is 4.3 times more volatile than BARRICK PD AUSTRALIA. It trades about 0.12 of its potential returns per unit of risk. BARRICK PD AUSTRALIA is currently generating about -0.12 per unit of risk. If you would invest  782.00  in Playtech plc on September 18, 2024 and sell it today you would earn a total of  161.00  from holding Playtech plc or generate 20.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	92.06%
Values	Daily Returns

Playtech plc  vs.  BARRICK PD AUSTRALIA

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.

BARRICK PD AUSTRALIA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BARRICK PD AUSTRALIA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BARRICK is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Playtech Plc and BARRICK

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

The idea behind Playtech plc and BARRICK PD AUSTRALIA 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.