Correlation Between Liberty Media and Playtika Holding
Can any of the company-specific risk be diversified away by investing in both Liberty Media 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 Liberty Media and Playtika Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Media and Playtika Holding Corp, you can compare the effects of market volatilities on Liberty Media 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 Liberty Media with a short position of Playtika Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Media and Playtika Holding.
Diversification Opportunities for Liberty Media and Playtika Holding
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Liberty and Playtika is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Media and Playtika Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtika Holding Corp and Liberty Media 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 Liberty Media 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 Corp has no effect on the direction of Liberty Media i.e., Liberty Media and Playtika Holding go up and down completely randomly.
Pair Corralation between Liberty Media and Playtika Holding
Assuming the 90 days horizon Liberty Media is expected to generate 1.59 times more return on investment than Playtika Holding. However, Liberty Media is 1.59 times more volatile than Playtika Holding Corp. It trades about 0.28 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about -0.05 per unit of risk. If you would invest 6,248 in Liberty Media on September 12, 2024 and sell it today you would earn a total of 836.00 from holding Liberty Media or generate 13.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Media vs. Playtika Holding Corp
Performance |
| Timeline |
| Liberty Media |
| Playtika Holding Corp |
Liberty Media and Playtika Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Media and Playtika Holding
The main advantage of trading using opposite Liberty Media and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Media 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.| Liberty Media vs. Playtika Holding Corp | Liberty Media vs. Life Time Group | Liberty Media vs. BRP Inc | Liberty Media vs. Marine Products |
| Playtika Holding vs. GDEV Inc | Playtika Holding vs. AEye Inc | Playtika Holding vs. Arqit Quantum Warrants | Playtika Holding vs. Xos Equity Warrants |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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