Correlation Between Playtika Holding and Freedom Holding
Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Freedom Holding 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 Freedom Holding 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 Freedom Holding Corp, you can compare the effects of market volatilities on Playtika Holding and Freedom Holding 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 Freedom Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Freedom Holding.
Diversification Opportunities for Playtika Holding and Freedom Holding
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Playtika and Freedom is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Freedom Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Holding Corp 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 Freedom Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Holding Corp has no effect on the direction of Playtika Holding i.e., Playtika Holding and Freedom Holding go up and down completely randomly.
Pair Corralation between Playtika Holding and Freedom Holding
Given the investment horizon of 90 days Playtika Holding Corp is expected to generate 0.62 times more return on investment than Freedom Holding. However, Playtika Holding Corp is 1.63 times less risky than Freedom Holding. It trades about 0.42 of its potential returns per unit of risk. Freedom Holding Corp is currently generating about 0.13 per unit of risk. If you would invest 763.00 in Playtika Holding Corp on August 26, 2024 and sell it today you would earn a total of 90.00 from holding Playtika Holding Corp or generate 11.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtika Holding Corp vs. Freedom Holding Corp
Performance |
| Timeline |
| Playtika Holding Corp |
| Freedom Holding Corp |
Playtika Holding and Freedom Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtika Holding and Freedom Holding
The main advantage of trading using opposite Playtika Holding and Freedom Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Freedom Holding 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 Freedom Holding will offset losses from the drop in Freedom Holding's long position.| Playtika Holding vs. AEye Inc | Playtika Holding vs. Arqit Quantum Warrants | Playtika Holding vs. Xos Equity Warrants |
| Freedom Holding vs. Nomura Holdings ADR | Freedom Holding vs. Scully Royalty | Freedom Holding vs. Oppenheimer Holdings | Freedom Holding vs. Houlihan Lokey |
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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