Correlation Between PLAYTIKA HOLDING and KRAKATAU STEEL
Can any of the company-specific risk be diversified away by investing in both PLAYTIKA HOLDING and KRAKATAU STEEL 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 PLAYTIKA HOLDING and KRAKATAU STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYTIKA HOLDING DL 01 and KRAKATAU STEEL B , you can compare the effects of market volatilities on PLAYTIKA HOLDING and KRAKATAU STEEL 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 PLAYTIKA HOLDING with a short position of KRAKATAU STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYTIKA HOLDING and KRAKATAU STEEL.
Diversification Opportunities for PLAYTIKA HOLDING and KRAKATAU STEEL
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PLAYTIKA and KRAKATAU is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and KRAKATAU STEEL B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRAKATAU STEEL B and PLAYTIKA HOLDING 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 PLAYTIKA HOLDING DL 01 are associated (or correlated) with KRAKATAU STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRAKATAU STEEL B has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and KRAKATAU STEEL go up and down completely randomly.
Pair Corralation between PLAYTIKA HOLDING and KRAKATAU STEEL
Assuming the 90 days horizon PLAYTIKA HOLDING is expected to generate 7.48 times less return on investment than KRAKATAU STEEL. But when comparing it to its historical volatility, PLAYTIKA HOLDING DL 01 is 3.8 times less risky than KRAKATAU STEEL. It trades about 0.02 of its potential returns per unit of risk. KRAKATAU STEEL B is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1.80 in KRAKATAU STEEL B on September 14, 2024 and sell it today you would lose (1.20) from holding KRAKATAU STEEL B or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYTIKA HOLDING DL 01 vs. KRAKATAU STEEL B
Performance |
| Timeline |
| PLAYTIKA HOLDING |
| KRAKATAU STEEL B |
PLAYTIKA HOLDING and KRAKATAU STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYTIKA HOLDING and KRAKATAU STEEL
The main advantage of trading using opposite PLAYTIKA HOLDING and KRAKATAU STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYTIKA HOLDING position performs unexpectedly, KRAKATAU STEEL 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 KRAKATAU STEEL will offset losses from the drop in KRAKATAU STEEL's long position.| PLAYTIKA HOLDING vs. Salesforce | PLAYTIKA HOLDING vs. SIMS METAL MGT | PLAYTIKA HOLDING vs. FIREWEED METALS P | PLAYTIKA HOLDING vs. Lion One Metals |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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