Correlation Between Playtika Holding and Magna International
Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Magna International 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 Magna International 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 Magna International, you can compare the effects of market volatilities on Playtika Holding and Magna International 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 Magna International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Magna International.
Diversification Opportunities for Playtika Holding and Magna International
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Playtika and Magna is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Magna International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna International 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 Magna International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna International has no effect on the direction of Playtika Holding i.e., Playtika Holding and Magna International go up and down completely randomly.
Pair Corralation between Playtika Holding and Magna International
Given the investment horizon of 90 days Playtika Holding Corp is expected to generate 1.23 times more return on investment than Magna International. However, Playtika Holding is 1.23 times more volatile than Magna International. It trades about 0.06 of its potential returns per unit of risk. Magna International is currently generating about -0.03 per unit of risk. If you would invest 694.00 in Playtika Holding Corp on August 28, 2024 and sell it today you would earn a total of 168.00 from holding Playtika Holding Corp or generate 24.21% 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. Magna International
Performance |
| Timeline |
| Playtika Holding Corp |
| Magna International |
Playtika Holding and Magna International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtika Holding and Magna International
The main advantage of trading using opposite Playtika Holding and Magna International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Magna International 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 Magna International will offset losses from the drop in Magna International's long position.| Playtika Holding vs. AEye Inc | Playtika Holding vs. Arqit Quantum Warrants | Playtika Holding vs. Xos Equity Warrants |
| Magna International vs. Allison Transmission Holdings | Magna International vs. Aptiv PLC | Magna International vs. LKQ Corporation | Magna International vs. Lear Corporation |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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