Correlation Between PLAYTIKA HOLDING and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both PLAYTIKA HOLDING and Playa Hotels 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 Playa Hotels 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 Playa Hotels Resorts, you can compare the effects of market volatilities on PLAYTIKA HOLDING and Playa Hotels 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 Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYTIKA HOLDING and Playa Hotels.
Diversification Opportunities for PLAYTIKA HOLDING and Playa Hotels
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PLAYTIKA and Playa is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and Playa Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playa Hotels Resorts 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 Playa Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playa Hotels Resorts has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and Playa Hotels go up and down completely randomly.
Pair Corralation between PLAYTIKA HOLDING and Playa Hotels
Assuming the 90 days horizon PLAYTIKA HOLDING is expected to generate 1.3 times less return on investment than Playa Hotels. But when comparing it to its historical volatility, PLAYTIKA HOLDING DL 01 is 1.33 times less risky than Playa Hotels. It trades about 0.22 of its potential returns per unit of risk. Playa Hotels Resorts is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 780.00 in Playa Hotels Resorts on August 24, 2024 and sell it today you would earn a total of 115.00 from holding Playa Hotels Resorts or generate 14.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYTIKA HOLDING DL 01 vs. Playa Hotels Resorts
Performance |
| Timeline |
| PLAYTIKA HOLDING |
| Playa Hotels Resorts |
PLAYTIKA HOLDING and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYTIKA HOLDING and Playa Hotels
The main advantage of trading using opposite PLAYTIKA HOLDING and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYTIKA HOLDING position performs unexpectedly, Playa Hotels 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 Playa Hotels will offset losses from the drop in Playa Hotels' long position.| PLAYTIKA HOLDING vs. Sea Limited | PLAYTIKA HOLDING vs. NEXON Co | PLAYTIKA HOLDING vs. Take Two Interactive Software | PLAYTIKA HOLDING vs. Bilibili |
| Playa Hotels vs. Superior Plus Corp | Playa Hotels vs. NMI Holdings | Playa Hotels vs. Origin Agritech | Playa Hotels vs. SIVERS SEMICONDUCTORS AB |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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