Correlation Between Playtika Holding and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Arrow Electronics 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 Arrow Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtika Holding Corp and Arrow Electronics, you can compare the effects of market volatilities on Playtika Holding and Arrow Electronics 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 Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Arrow Electronics.
Diversification Opportunities for Playtika Holding and Arrow Electronics
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Playtika and Arrow is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics 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 Corp are associated (or correlated) with Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of Playtika Holding i.e., Playtika Holding and Arrow Electronics go up and down completely randomly.
Pair Corralation between Playtika Holding and Arrow Electronics
Given the investment horizon of 90 days Playtika Holding Corp is expected to generate 1.35 times more return on investment than Arrow Electronics. However, Playtika Holding is 1.35 times more volatile than Arrow Electronics. It trades about 0.06 of its potential returns per unit of risk. Arrow Electronics is currently generating about 0.03 per unit of risk. If you would invest 694.00 in Playtika Holding Corp on August 28, 2024 and sell it today you would earn a total of 168.00 from holding Playtika Holding Corp or generate 24.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtika Holding Corp vs. Arrow Electronics
Performance |
| Timeline |
| Playtika Holding Corp |
| Arrow Electronics |
Playtika Holding and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtika Holding and Arrow Electronics
The main advantage of trading using opposite Playtika Holding and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| Playtika Holding vs. AEye Inc | Playtika Holding vs. Arqit Quantum Warrants | Playtika Holding vs. Xos Equity Warrants |
| Arrow Electronics vs. Insight Enterprises | Arrow Electronics vs. Synnex | Arrow Electronics vs. Climb Global Solutions | Arrow Electronics vs. ScanSource |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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