Correlation Between Playtika Holding and Pinterest
Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Pinterest 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 Pinterest 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 Pinterest, you can compare the effects of market volatilities on Playtika Holding and Pinterest 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 Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Pinterest.
Diversification Opportunities for Playtika Holding and Pinterest
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Playtika and Pinterest is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest 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 Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of Playtika Holding i.e., Playtika Holding and Pinterest go up and down completely randomly.
Pair Corralation between Playtika Holding and Pinterest
Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the Pinterest. But the stock apears to be less risky and, when comparing its historical volatility, Playtika Holding Corp is 1.6 times less risky than Pinterest. The stock trades about -0.05 of its potential returns per unit of risk. The Pinterest is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,228 in Pinterest on November 2, 2024 and sell it today you would earn a total of 65.00 from holding Pinterest or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtika Holding Corp vs. Pinterest
Performance |
| Timeline |
| Playtika Holding Corp |
Playtika Holding and Pinterest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtika Holding and Pinterest
The main advantage of trading using opposite Playtika Holding and Pinterest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Pinterest 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 Pinterest will offset losses from the drop in Pinterest's long position.| Playtika Holding vs. Doubledown Interactive Co | Playtika Holding vs. SohuCom | Playtika Holding vs. Playstudios | Playtika Holding vs. GDEV Inc |
| Pinterest vs. Twilio Inc | Pinterest vs. Meta Platforms | Pinterest vs. Alphabet Inc Class C | Pinterest vs. Alphabet Inc Class A |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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