Correlation Between PLAYTIKA HOLDING and Sea
Can any of the company-specific risk be diversified away by investing in both PLAYTIKA HOLDING and Sea 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 Sea 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 Sea Limited, you can compare the effects of market volatilities on PLAYTIKA HOLDING and Sea 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 Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYTIKA HOLDING and Sea.
Diversification Opportunities for PLAYTIKA HOLDING and Sea
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PLAYTIKA and Sea is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and Sea Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea Limited 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 Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea Limited has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and Sea go up and down completely randomly.
Pair Corralation between PLAYTIKA HOLDING and Sea
Assuming the 90 days horizon PLAYTIKA HOLDING is expected to generate 4.02 times less return on investment than Sea. In addition to that, PLAYTIKA HOLDING is 1.03 times more volatile than Sea Limited. It trades about 0.06 of its total potential returns per unit of risk. Sea Limited is currently generating about 0.23 per unit of volatility. If you would invest 3,525 in Sea Limited on August 28, 2024 and sell it today you would earn a total of 7,275 from holding Sea Limited or generate 206.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.53% |
| Values | Daily Returns |
PLAYTIKA HOLDING DL 01 vs. Sea Limited
Performance |
| Timeline |
| PLAYTIKA HOLDING |
| Sea Limited |
PLAYTIKA HOLDING and Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYTIKA HOLDING and Sea
The main advantage of trading using opposite PLAYTIKA HOLDING and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYTIKA HOLDING position performs unexpectedly, Sea 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 Sea will offset losses from the drop in Sea's long position.| PLAYTIKA HOLDING vs. SYSTEMAIR AB | PLAYTIKA HOLDING vs. United Natural Foods | PLAYTIKA HOLDING vs. HF SINCLAIR P | PLAYTIKA HOLDING vs. Fair Isaac 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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