Correlation Between Playtika Holding and BRP
Can any of the company-specific risk be diversified away by investing in both Playtika Holding and BRP 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 BRP 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 BRP Inc, you can compare the effects of market volatilities on Playtika Holding and BRP 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 BRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and BRP.
Diversification Opportunities for Playtika Holding and BRP
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Playtika and BRP is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and BRP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRP Inc 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 BRP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRP Inc has no effect on the direction of Playtika Holding i.e., Playtika Holding and BRP go up and down completely randomly.
Pair Corralation between Playtika Holding and BRP
Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the BRP. But the stock apears to be less risky and, when comparing its historical volatility, Playtika Holding Corp is 2.0 times less risky than BRP. The stock trades about -0.12 of its potential returns per unit of risk. The BRP Inc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,813 in BRP Inc on September 13, 2024 and sell it today you would earn a total of 462.00 from holding BRP Inc or generate 9.6% 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. BRP Inc
Performance |
| Timeline |
| Playtika Holding Corp |
| BRP Inc |
Playtika Holding and BRP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtika Holding and BRP
The main advantage of trading using opposite Playtika Holding and BRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, BRP 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 BRP will offset losses from the drop in BRP's long position.| Playtika Holding vs. SohuCom | Playtika Holding vs. Playstudios | Playtika Holding vs. NetEase | Playtika Holding vs. Golden Matrix Group |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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