Correlation Between Playtika Holding and Eastern
Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Eastern 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 Eastern 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 Eastern Co, you can compare the effects of market volatilities on Playtika Holding and Eastern 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 Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Eastern.
Diversification Opportunities for Playtika Holding and Eastern
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Playtika and Eastern is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern 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 Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of Playtika Holding i.e., Playtika Holding and Eastern go up and down completely randomly.
Pair Corralation between Playtika Holding and Eastern
Given the investment horizon of 90 days Playtika Holding is expected to generate 3.64 times less return on investment than Eastern. But when comparing it to its historical volatility, Playtika Holding Corp is 1.56 times less risky than Eastern. It trades about 0.02 of its potential returns per unit of risk. Eastern Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,629 in Eastern Co on September 12, 2024 and sell it today you would earn a total of 311.00 from holding Eastern Co or generate 11.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Playtika Holding Corp vs. Eastern Co
Performance |
| Timeline |
| Playtika Holding Corp |
| Eastern |
Playtika Holding and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtika Holding and Eastern
The main advantage of trading using opposite Playtika Holding and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Eastern 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 Eastern will offset losses from the drop in Eastern's long position.| Playtika Holding vs. GDEV Inc | Playtika Holding vs. AEye Inc | Playtika Holding vs. Arqit Quantum Warrants | Playtika Holding vs. Xos Equity Warrants |
| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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