Correlation Between Playtech Plc and Northern Bear
Can any of the company-specific risk be diversified away by investing in both Playtech Plc and Northern Bear 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 Northern Bear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtech Plc and Northern Bear Plc, you can compare the effects of market volatilities on Playtech Plc and Northern Bear 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 Northern Bear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtech Plc and Northern Bear.
Diversification Opportunities for Playtech Plc and Northern Bear
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Playtech and Northern is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Playtech Plc and Northern Bear Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Bear Plc 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 Northern Bear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Bear Plc has no effect on the direction of Playtech Plc i.e., Playtech Plc and Northern Bear go up and down completely randomly.
Pair Corralation between Playtech Plc and Northern Bear
Assuming the 90 days trading horizon Playtech Plc is expected to generate 1.8 times less return on investment than Northern Bear. But when comparing it to its historical volatility, Playtech Plc is 1.14 times less risky than Northern Bear. It trades about 0.34 of its potential returns per unit of risk. Northern Bear Plc is currently generating about 0.54 of returns per unit of risk over similar time horizon. If you would invest 10,750 in Northern Bear Plc on September 6, 2025 and sell it today you would earn a total of 4,200 from holding Northern Bear Plc or generate 39.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtech Plc vs. Northern Bear Plc
Performance |
| Timeline |
| Playtech Plc |
| Northern Bear Plc |
Playtech Plc and Northern Bear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtech Plc and Northern Bear
The main advantage of trading using opposite Playtech Plc and Northern Bear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtech Plc position performs unexpectedly, Northern Bear 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 Northern Bear will offset losses from the drop in Northern Bear's long position.| Playtech Plc vs. Central Asia Metals | Playtech Plc vs. Atalaya Mining | Playtech Plc vs. Cornish Metals | Playtech Plc vs. PPHE Hotel Group |
| Northern Bear vs. Capital Metals PLC | Northern Bear vs. Playtech Plc | Northern Bear vs. Critical Metals Plc | Northern Bear vs. Universal Display Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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