Correlation Between Playtika Holding and Palomar Holdings
Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Palomar Holdings 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 Palomar Holdings 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 Palomar Holdings, you can compare the effects of market volatilities on Playtika Holding and Palomar Holdings 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 Palomar Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Palomar Holdings.
Diversification Opportunities for Playtika Holding and Palomar Holdings
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Playtika and Palomar is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Palomar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palomar Holdings 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 Palomar Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palomar Holdings has no effect on the direction of Playtika Holding i.e., Playtika Holding and Palomar Holdings go up and down completely randomly.
Pair Corralation between Playtika Holding and Palomar Holdings
Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the Palomar Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Playtika Holding Corp is 1.43 times less risky than Palomar Holdings. The stock trades about -0.12 of its potential returns per unit of risk. The Palomar Holdings is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 10,069 in Palomar Holdings on September 13, 2024 and sell it today you would earn a total of 776.00 from holding Palomar Holdings or generate 7.71% 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. Palomar Holdings
Performance |
| Timeline |
| Playtika Holding Corp |
| Palomar Holdings |
Playtika Holding and Palomar Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtika Holding and Palomar Holdings
The main advantage of trading using opposite Playtika Holding and Palomar Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Palomar Holdings 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 Palomar Holdings will offset losses from the drop in Palomar Holdings' long position.| Playtika Holding vs. SohuCom | Playtika Holding vs. Playstudios | Playtika Holding vs. NetEase | Playtika Holding vs. Golden Matrix Group |
| Palomar Holdings vs. Progressive Corp | Palomar Holdings vs. Chubb | Palomar Holdings vs. Cincinnati Financial | Palomar Holdings vs. W R Berkley |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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