Correlation Between Playtika Holding and SM Investments
Can any of the company-specific risk be diversified away by investing in both Playtika Holding and SM Investments 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 SM Investments 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 SM Investments, you can compare the effects of market volatilities on Playtika Holding and SM Investments 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 SM Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and SM Investments.
Diversification Opportunities for Playtika Holding and SM Investments
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Playtika and SVTMF is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and SM Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SM Investments 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 SM Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SM Investments has no effect on the direction of Playtika Holding i.e., Playtika Holding and SM Investments go up and down completely randomly.
Pair Corralation between Playtika Holding and SM Investments
Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the SM Investments. In addition to that, Playtika Holding is 1.77 times more volatile than SM Investments. It trades about -0.36 of its total potential returns per unit of risk. SM Investments is currently generating about -0.22 per unit of volatility. If you would invest 1,640 in SM Investments on October 11, 2024 and sell it today you would lose (99.00) from holding SM Investments or give up 6.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtika Holding Corp vs. SM Investments
Performance |
| Timeline |
| Playtika Holding Corp |
| SM Investments |
Playtika Holding and SM Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtika Holding and SM Investments
The main advantage of trading using opposite Playtika Holding and SM Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, SM Investments 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 SM Investments will offset losses from the drop in SM Investments' long position.| Playtika Holding vs. Doubledown Interactive Co | Playtika Holding vs. SohuCom | Playtika Holding vs. Playstudios | Playtika Holding vs. GDEV Inc |
| SM Investments vs. Evolution Gaming Group | SM Investments vs. Galaxy Gaming | SM Investments vs. GameStop Corp | SM Investments vs. Playtika Holding Corp |
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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