Correlation Between Seche Environnement and Playtech Plc

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

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

Diversification Opportunities for Seche Environnement and Playtech Plc

0.74

Correlation Coefficient

Seche Environnement  Playtech Plc

Poor diversification

The 3 months correlation between Seche and Playtech is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Seche Environnement SA and Playtech Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtech Plc and Seche Environnement 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 Seche Environnement SA are associated (or correlated) with Playtech Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtech Plc has no effect on the direction of Seche Environnement i.e., Seche Environnement and Playtech Plc go up and down completely randomly.

Pair Corralation between Seche Environnement and Playtech Plc

Assuming the 90 days trading horizon Seche Environnement is expected to generate 1.24 times less return on investment than Playtech Plc. In addition to that, Seche Environnement is 1.14 times more volatile than Playtech Plc. It trades about 0.25 of its total potential returns per unit of risk. Playtech Plc is currently generating about 0.35 per unit of volatility. If you would invest  35,200  in Playtech Plc on April 22, 2025 and sell it today you would earn a total of  3,300  from holding Playtech Plc or generate 9.38% return on investment over 90 days.

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

Seche Environnement SA  vs.  Playtech Plc

Seche Environnement

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Seche Environnement SA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Seche Environnement unveiled solid returns over the last few months and may actually be approaching a breakup point.

Playtech Plc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Playtech Plc are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Playtech Plc unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Seche Environnement and Playtech Plc

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

The idea behind Seche Environnement SA and Playtech Plc 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.