Correlation Between Summit Materials and PLAYTIKA HOLDING
Can any of the company-specific risk be diversified away by investing in both Summit Materials and PLAYTIKA HOLDING 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 Summit Materials and PLAYTIKA HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and PLAYTIKA HOLDING DL 01, you can compare the effects of market volatilities on Summit Materials and PLAYTIKA HOLDING 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 Summit Materials with a short position of PLAYTIKA HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and PLAYTIKA HOLDING.
Diversification Opportunities for Summit Materials and PLAYTIKA HOLDING
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Summit and PLAYTIKA is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and PLAYTIKA HOLDING DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTIKA HOLDING and Summit Materials 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 Summit Materials are associated (or correlated) with PLAYTIKA HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYTIKA HOLDING has no effect on the direction of Summit Materials i.e., Summit Materials and PLAYTIKA HOLDING go up and down completely randomly.
Pair Corralation between Summit Materials and PLAYTIKA HOLDING
Assuming the 90 days trading horizon Summit Materials is expected to generate 2.18 times less return on investment than PLAYTIKA HOLDING. But when comparing it to its historical volatility, Summit Materials is 1.42 times less risky than PLAYTIKA HOLDING. It trades about 0.12 of its potential returns per unit of risk. PLAYTIKA HOLDING DL 01 is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 635.00 in PLAYTIKA HOLDING DL 01 on October 28, 2024 and sell it today you would earn a total of 35.00 from holding PLAYTIKA HOLDING DL 01 or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Materials vs. PLAYTIKA HOLDING DL 01
Performance |
| Timeline |
| Summit Materials |
| PLAYTIKA HOLDING |
Summit Materials and PLAYTIKA HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and PLAYTIKA HOLDING
The main advantage of trading using opposite Summit Materials and PLAYTIKA HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, PLAYTIKA HOLDING 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 PLAYTIKA HOLDING will offset losses from the drop in PLAYTIKA HOLDING's long position.| Summit Materials vs. CHINA EDUCATION GROUP | Summit Materials vs. Air Transport Services | Summit Materials vs. SPORT LISBOA E | Summit Materials vs. betterU Education Corp |
| PLAYTIKA HOLDING vs. NEXON Co | PLAYTIKA HOLDING vs. NEXON Co | PLAYTIKA HOLDING vs. Take Two Interactive Software | PLAYTIKA HOLDING vs. Aristocrat Leisure Limited |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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