Correlation Between Playtika Holding and Nintendo
Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Nintendo 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 Nintendo 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 Nintendo Co, you can compare the effects of market volatilities on Playtika Holding and Nintendo 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 Nintendo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Nintendo.
Diversification Opportunities for Playtika Holding and Nintendo
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Playtika and Nintendo is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Nintendo Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nintendo 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 Nintendo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nintendo has no effect on the direction of Playtika Holding i.e., Playtika Holding and Nintendo go up and down completely randomly.
Pair Corralation between Playtika Holding and Nintendo
Given the investment horizon of 90 days Playtika Holding Corp is expected to generate 0.34 times more return on investment than Nintendo. However, Playtika Holding Corp is 2.98 times less risky than Nintendo. It trades about 0.36 of its potential returns per unit of risk. Nintendo Co is currently generating about -0.02 per unit of risk. If you would invest 791.00 in Playtika Holding Corp on August 27, 2024 and sell it today you would earn a total of 62.00 from holding Playtika Holding Corp or generate 7.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtika Holding Corp vs. Nintendo Co
Performance |
| Timeline |
| Playtika Holding Corp |
| Nintendo |
Playtika Holding and Nintendo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtika Holding and Nintendo
The main advantage of trading using opposite Playtika Holding and Nintendo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Nintendo 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 Nintendo will offset losses from the drop in Nintendo's long position.| Playtika Holding vs. AEye Inc | Playtika Holding vs. Arqit Quantum Warrants | Playtika Holding vs. Xos Equity Warrants |
| Nintendo vs. Take Two Interactive Software | Nintendo vs. Electronic Arts | Nintendo vs. UbiSoft Entertainment | Nintendo vs. Square Enix Holdings |
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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