Correlation Between Playtika Holding and Inter Parfums
Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Inter Parfums 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 Inter Parfums 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 Inter Parfums, you can compare the effects of market volatilities on Playtika Holding and Inter Parfums 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 Inter Parfums. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Inter Parfums.
Diversification Opportunities for Playtika Holding and Inter Parfums
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Playtika and Inter is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Inter Parfums in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Parfums 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 Inter Parfums. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Parfums has no effect on the direction of Playtika Holding i.e., Playtika Holding and Inter Parfums go up and down completely randomly.
Pair Corralation between Playtika Holding and Inter Parfums
Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the Inter Parfums. But the stock apears to be less risky and, when comparing its historical volatility, Playtika Holding Corp is 1.14 times less risky than Inter Parfums. The stock trades about -0.01 of its potential returns per unit of risk. The Inter Parfums is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 11,970 in Inter Parfums on September 1, 2024 and sell it today you would earn a total of 1,796 from holding Inter Parfums or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtika Holding Corp vs. Inter Parfums
Performance |
| Timeline |
| Playtika Holding Corp |
| Inter Parfums |
Playtika Holding and Inter Parfums Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtika Holding and Inter Parfums
The main advantage of trading using opposite Playtika Holding and Inter Parfums positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Inter Parfums 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 Inter Parfums will offset losses from the drop in Inter Parfums' long position.| Playtika Holding vs. Gravity Co | Playtika Holding vs. NetEase | Playtika Holding vs. Snail, Class A | Playtika Holding vs. GameSquare Holdings |
| Inter Parfums vs. Seneca Foods Corp | Inter Parfums vs. Central Garden Pet | Inter Parfums vs. Central Garden Pet | Inter Parfums vs. Lifeway Foods |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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