Correlation Between PLAYTIKA HOLDING and Metro AG
Can any of the company-specific risk be diversified away by investing in both PLAYTIKA HOLDING and Metro AG 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 Metro AG 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 Metro AG, you can compare the effects of market volatilities on PLAYTIKA HOLDING and Metro AG 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 Metro AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYTIKA HOLDING and Metro AG.
Diversification Opportunities for PLAYTIKA HOLDING and Metro AG
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PLAYTIKA and Metro is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and Metro AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro AG 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 Metro AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro AG has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and Metro AG go up and down completely randomly.
Pair Corralation between PLAYTIKA HOLDING and Metro AG
Assuming the 90 days horizon PLAYTIKA HOLDING DL 01 is expected to under-perform the Metro AG. In addition to that, PLAYTIKA HOLDING is 1.3 times more volatile than Metro AG. It trades about -0.15 of its total potential returns per unit of risk. Metro AG is currently generating about -0.17 per unit of volatility. If you would invest 430.00 in Metro AG on September 19, 2024 and sell it today you would lose (29.00) from holding Metro AG or give up 6.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYTIKA HOLDING DL 01 vs. Metro AG
Performance |
| Timeline |
| PLAYTIKA HOLDING |
| Metro AG |
PLAYTIKA HOLDING and Metro AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYTIKA HOLDING and Metro AG
The main advantage of trading using opposite PLAYTIKA HOLDING and Metro AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYTIKA HOLDING position performs unexpectedly, Metro AG 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 Metro AG will offset losses from the drop in Metro AG's long position.| PLAYTIKA HOLDING vs. NEXON Co | PLAYTIKA HOLDING vs. Take Two Interactive Software | PLAYTIKA HOLDING vs. Superior Plus Corp | PLAYTIKA HOLDING vs. SIVERS SEMICONDUCTORS AB |
| Metro AG vs. Metro AG | Metro AG vs. Superior Plus Corp | Metro AG vs. SIVERS SEMICONDUCTORS AB | Metro AG vs. NorAm Drilling AS |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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