Correlation Between Playstudios and Lotus Technology
Can any of the company-specific risk be diversified away by investing in both Playstudios and Lotus Technology 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 Lotus Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playstudios and Lotus Technology American, you can compare the effects of market volatilities on Playstudios and Lotus Technology 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 Lotus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playstudios and Lotus Technology.
Diversification Opportunities for Playstudios and Lotus Technology
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Playstudios and Lotus is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Playstudios and Lotus Technology American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Technology American 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 Lotus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Technology American has no effect on the direction of Playstudios i.e., Playstudios and Lotus Technology go up and down completely randomly.
Pair Corralation between Playstudios and Lotus Technology
Given the investment horizon of 90 days Playstudios is expected to generate 0.51 times more return on investment than Lotus Technology. However, Playstudios is 1.98 times less risky than Lotus Technology. It trades about -0.1 of its potential returns per unit of risk. Lotus Technology American is currently generating about -0.13 per unit of risk. If you would invest 181.00 in Playstudios on November 28, 2024 and sell it today you would lose (14.00) from holding Playstudios or give up 7.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playstudios vs. Lotus Technology American
Performance |
| Timeline |
| Playstudios |
| Lotus Technology American |
Playstudios and Lotus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playstudios and Lotus Technology
The main advantage of trading using opposite Playstudios and Lotus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playstudios position performs unexpectedly, Lotus Technology 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 Lotus Technology will offset losses from the drop in Lotus Technology's long position.| Playstudios vs. SohuCom | Playstudios vs. Snail, Class A | Playstudios vs. Playtika Holding Corp | Playstudios vs. Golden Matrix Group |
| Lotus Technology vs. Imax Corp | Lotus Technology vs. Pinterest | Lotus Technology vs. TIM Participacoes SA | Lotus Technology vs. Hewlett Packard Enterprise |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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