Correlation Between Playtika Holding and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Hanover Insurance 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 Hanover Insurance 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 The Hanover Insurance, you can compare the effects of market volatilities on Playtika Holding and Hanover Insurance 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 Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Hanover Insurance.
Diversification Opportunities for Playtika Holding and Hanover Insurance
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Playtika and Hanover is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance 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 Hanover Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanover Insurance has no effect on the direction of Playtika Holding i.e., Playtika Holding and Hanover Insurance go up and down completely randomly.
Pair Corralation between Playtika Holding and Hanover Insurance
Given the investment horizon of 90 days Playtika Holding Corp is expected to generate 1.3 times more return on investment than Hanover Insurance. However, Playtika Holding is 1.3 times more volatile than The Hanover Insurance. It trades about -0.12 of its potential returns per unit of risk. The Hanover Insurance is currently generating about -0.23 per unit of risk. If you would invest 855.00 in Playtika Holding Corp on September 13, 2024 and sell it today you would lose (28.00) from holding Playtika Holding Corp or give up 3.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtika Holding Corp vs. The Hanover Insurance
Performance |
| Timeline |
| Playtika Holding Corp |
| Hanover Insurance |
Playtika Holding and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtika Holding and Hanover Insurance
The main advantage of trading using opposite Playtika Holding and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Hanover Insurance 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 Hanover Insurance will offset losses from the drop in Hanover Insurance's long position.| Playtika Holding vs. SohuCom | Playtika Holding vs. Playstudios | Playtika Holding vs. NetEase | Playtika Holding vs. Golden Matrix Group |
| Hanover Insurance vs. Horace Mann Educators | Hanover Insurance vs. Kemper | Hanover Insurance vs. RLI Corp | Hanover Insurance vs. Global Indemnity PLC |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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