Correlation Between Playtika Holding and Westinghouse Air
Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Westinghouse Air 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 Westinghouse Air 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 Westinghouse Air Brake, you can compare the effects of market volatilities on Playtika Holding and Westinghouse Air 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 Westinghouse Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Westinghouse Air.
Diversification Opportunities for Playtika Holding and Westinghouse Air
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Playtika and Westinghouse is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Westinghouse Air Brake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westinghouse Air Brake 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 Westinghouse Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westinghouse Air Brake has no effect on the direction of Playtika Holding i.e., Playtika Holding and Westinghouse Air go up and down completely randomly.
Pair Corralation between Playtika Holding and Westinghouse Air
Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the Westinghouse Air. In addition to that, Playtika Holding is 1.91 times more volatile than Westinghouse Air Brake. It trades about -0.02 of its total potential returns per unit of risk. Westinghouse Air Brake is currently generating about 0.16 per unit of volatility. If you would invest 9,874 in Westinghouse Air Brake on September 2, 2024 and sell it today you would earn a total of 10,188 from holding Westinghouse Air Brake or generate 103.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtika Holding Corp vs. Westinghouse Air Brake
Performance |
| Timeline |
| Playtika Holding Corp |
| Westinghouse Air Brake |
Playtika Holding and Westinghouse Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtika Holding and Westinghouse Air
The main advantage of trading using opposite Playtika Holding and Westinghouse Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Westinghouse Air 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 Westinghouse Air will offset losses from the drop in Westinghouse Air's long position.| Playtika Holding vs. Gravity Co | Playtika Holding vs. NetEase | Playtika Holding vs. Snail, Class A | Playtika Holding vs. GameSquare Holdings |
| Westinghouse Air vs. Greenbrier Companies | Westinghouse Air vs. LB Foster | Westinghouse Air vs. CSX Corporation | Westinghouse Air vs. Norfolk Southern |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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