Correlation Between Playtika Holding and Cumulus Media
Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Cumulus Media 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 Cumulus Media 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 Cumulus Media Class, you can compare the effects of market volatilities on Playtika Holding and Cumulus Media 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 Cumulus Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Cumulus Media.
Diversification Opportunities for Playtika Holding and Cumulus Media
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Playtika and Cumulus is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Cumulus Media Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumulus Media Class 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 Cumulus Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumulus Media Class has no effect on the direction of Playtika Holding i.e., Playtika Holding and Cumulus Media go up and down completely randomly.
Pair Corralation between Playtika Holding and Cumulus Media
Given the investment horizon of 90 days Playtika Holding Corp is expected to generate 0.47 times more return on investment than Cumulus Media. However, Playtika Holding Corp is 2.12 times less risky than Cumulus Media. It trades about 0.06 of its potential returns per unit of risk. Cumulus Media Class is currently generating about -0.16 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtika Holding Corp vs. Cumulus Media Class
Performance |
| Timeline |
| Playtika Holding Corp |
| Cumulus Media Class |
Playtika Holding and Cumulus Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtika Holding and Cumulus Media
The main advantage of trading using opposite Playtika Holding and Cumulus Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Cumulus Media 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 Cumulus Media will offset losses from the drop in Cumulus Media's long position.| Playtika Holding vs. AEye Inc | Playtika Holding vs. Arqit Quantum Warrants | Playtika Holding vs. Xos Equity Warrants |
| Cumulus Media vs. Walt Disney | Cumulus Media vs. Roku Inc | Cumulus Media vs. Netflix | Cumulus Media vs. AMC Entertainment Holdings |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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