Correlation Between Playstudios and Activision Blizzard
Can any of the company-specific risk be diversified away by investing in both Playstudios and Activision Blizzard 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 Playstudios and Activision Blizzard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playstudios and Activision Blizzard, you can compare the effects of market volatilities on Playstudios and Activision Blizzard 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 Playstudios with a short position of Activision Blizzard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playstudios and Activision Blizzard.
Diversification Opportunities for Playstudios and Activision Blizzard
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Playstudios and Activision is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Playstudios and Activision Blizzard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Activision Blizzard and Playstudios 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 Playstudios are associated (or correlated) with Activision Blizzard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Activision Blizzard has no effect on the direction of Playstudios i.e., Playstudios and Activision Blizzard go up and down completely randomly.
Pair Corralation between Playstudios and Activision Blizzard
Given the investment horizon of 90 days Playstudios is expected to under-perform the Activision Blizzard. In addition to that, Playstudios is 1.89 times more volatile than Activision Blizzard. It trades about -0.03 of its total potential returns per unit of risk. Activision Blizzard is currently generating about 0.08 per unit of volatility. If you would invest 7,593 in Activision Blizzard on August 28, 2024 and sell it today you would earn a total of 1,662 from holding Activision Blizzard or generate 21.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 31.72% |
| Values | Daily Returns |
Playstudios vs. Activision Blizzard
Performance |
| Timeline |
| Playstudios |
| Activision Blizzard |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Playstudios and Activision Blizzard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playstudios and Activision Blizzard
The main advantage of trading using opposite Playstudios and Activision Blizzard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playstudios position performs unexpectedly, Activision Blizzard 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 Activision Blizzard will offset losses from the drop in Activision Blizzard's long position.| Playstudios vs. SohuCom | Playstudios vs. Snail, Class A | Playstudios vs. Playtika Holding Corp | Playstudios vs. Golden Matrix Group |
| Activision Blizzard vs. Take Two Interactive Software | Activision Blizzard vs. Nintendo Co ADR | Activision Blizzard vs. NetEase | Activision Blizzard vs. Playtika Holding 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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