Correlation Between Playtech Plc and Next Technology

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

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

Diversification Opportunities for Playtech Plc and Next Technology

-0.71

Correlation Coefficient

Playtech Plc  Next Technology

Pay attention - limited upside

The 3 months correlation between Playtech and Next is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Playtech plc and Next Technology Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Technology Holding 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 Next Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Technology Holding has no effect on the direction of Playtech Plc i.e., Playtech Plc and Next Technology go up and down completely randomly.

Pair Corralation between Playtech Plc and Next Technology

Assuming the 90 days horizon Playtech plc is expected to generate 0.1 times more return on investment than Next Technology. However, Playtech plc is 9.6 times less risky than Next Technology. It trades about 0.01 of its potential returns per unit of risk. Next Technology Holding is currently generating about -0.13 per unit of risk. If you would invest  480.00  in Playtech plc on July 10, 2025 and sell it today you would earn a total of  0.00  from holding Playtech plc or generate 0.0% 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.  Next Technology Holding

Playtech plc

Risk-Adjusted Performance

Weakest

Over the last 90 days Playtech plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Playtech Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Next Technology Holding

Risk-Adjusted Performance

Weakest

Over the last 90 days Next Technology Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in November 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Playtech Plc and Next Technology

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

The idea behind Playtech plc and Next Technology Holding 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.