Correlation Between Playtika Holding and Take Two
Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Take Two 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 Take Two 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 Take Two Interactive Software, you can compare the effects of market volatilities on Playtika Holding and Take Two 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 Take Two. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Take Two.
Diversification Opportunities for Playtika Holding and Take Two
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Playtika and Take is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Take Two Interactive Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Take Two Interactive 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 Take Two. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Take Two Interactive has no effect on the direction of Playtika Holding i.e., Playtika Holding and Take Two go up and down completely randomly.
Pair Corralation between Playtika Holding and Take Two
Given the investment horizon of 90 days Playtika Holding is expected to generate 2.11 times less return on investment than Take Two. But when comparing it to its historical volatility, Playtika Holding Corp is 1.83 times less risky than Take Two. It trades about 0.36 of its potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 16,075 in Take Two Interactive Software on August 27, 2024 and sell it today you would earn a total of 2,740 from holding Take Two Interactive Software or generate 17.05% 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. Take Two Interactive Software
Performance |
| Timeline |
| Playtika Holding Corp |
| Take Two Interactive |
Playtika Holding and Take Two Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtika Holding and Take Two
The main advantage of trading using opposite Playtika Holding and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Take Two 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 Take Two will offset losses from the drop in Take Two's long position.| Playtika Holding vs. AEye Inc | Playtika Holding vs. Arqit Quantum Warrants | Playtika Holding vs. Xos Equity Warrants |
| Take Two vs. Playstudios | Take Two vs. Talkspace | Take Two vs. Katapult Holdings Equity | Take Two vs. Aquagold International |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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