Correlation Between Playtika Holding and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Eastman Chemical 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 Eastman Chemical 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 Eastman Chemical, you can compare the effects of market volatilities on Playtika Holding and Eastman Chemical 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 Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Eastman Chemical.
Diversification Opportunities for Playtika Holding and Eastman Chemical
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Playtika and Eastman is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical 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 Eastman Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Chemical has no effect on the direction of Playtika Holding i.e., Playtika Holding and Eastman Chemical go up and down completely randomly.
Pair Corralation between Playtika Holding and Eastman Chemical
Given the investment horizon of 90 days Playtika Holding is expected to generate 3.06 times less return on investment than Eastman Chemical. In addition to that, Playtika Holding is 1.57 times more volatile than Eastman Chemical. It trades about 0.01 of its total potential returns per unit of risk. Eastman Chemical is currently generating about 0.04 per unit of volatility. If you would invest 8,310 in Eastman Chemical on August 31, 2024 and sell it today you would earn a total of 2,162 from holding Eastman Chemical or generate 26.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtika Holding Corp vs. Eastman Chemical
Performance |
| Timeline |
| Playtika Holding Corp |
| Eastman Chemical |
Playtika Holding and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtika Holding and Eastman Chemical
The main advantage of trading using opposite Playtika Holding and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Eastman Chemical 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 Eastman Chemical will offset losses from the drop in Eastman Chemical's long position.| Playtika Holding vs. Doubledown Interactive Co | Playtika Holding vs. SohuCom | Playtika Holding vs. Playstudios | Playtika Holding vs. GDEV Inc |
| Eastman Chemical vs. Air Products and | Eastman Chemical vs. International Flavors Fragrances | Eastman Chemical vs. Sherwin Williams Co | Eastman Chemical vs. PPG Industries |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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