Correlation Between Playtika Holding and CD Projekt
Can any of the company-specific risk be diversified away by investing in both Playtika Holding and CD Projekt 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 CD Projekt 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 CD Projekt SA, you can compare the effects of market volatilities on Playtika Holding and CD Projekt 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 CD Projekt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and CD Projekt.
Diversification Opportunities for Playtika Holding and CD Projekt
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Playtika and OTGLF is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and CD Projekt SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CD Projekt SA 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 CD Projekt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CD Projekt SA has no effect on the direction of Playtika Holding i.e., Playtika Holding and CD Projekt go up and down completely randomly.
Pair Corralation between Playtika Holding and CD Projekt
Given the investment horizon of 90 days Playtika Holding is expected to generate 1.88 times less return on investment than CD Projekt. But when comparing it to its historical volatility, Playtika Holding Corp is 1.14 times less risky than CD Projekt. It trades about 0.02 of its potential returns per unit of risk. CD Projekt SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,856 in CD Projekt SA on August 28, 2024 and sell it today you would earn a total of 647.00 from holding CD Projekt SA or generate 22.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtika Holding Corp vs. CD Projekt SA
Performance |
| Timeline |
| Playtika Holding Corp |
| CD Projekt SA |
Playtika Holding and CD Projekt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtika Holding and CD Projekt
The main advantage of trading using opposite Playtika Holding and CD Projekt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, CD Projekt 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 CD Projekt will offset losses from the drop in CD Projekt's long position.| Playtika Holding vs. AEye Inc | Playtika Holding vs. Arqit Quantum Warrants | Playtika Holding vs. Xos Equity Warrants |
| CD Projekt vs. HUMANA INC | CD Projekt vs. SCOR PK | CD Projekt vs. Aquagold International | CD Projekt vs. Barloworld Ltd ADR |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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