Correlation Between Playtika Holding and Zhihu
Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Zhihu 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 Zhihu 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 Zhihu Inc ADR, you can compare the effects of market volatilities on Playtika Holding and Zhihu 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 Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Zhihu.
Diversification Opportunities for Playtika Holding and Zhihu
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Playtika and Zhihu is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Zhihu Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhihu Inc ADR 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 Zhihu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhihu Inc ADR has no effect on the direction of Playtika Holding i.e., Playtika Holding and Zhihu go up and down completely randomly.
Pair Corralation between Playtika Holding and Zhihu
Given the investment horizon of 90 days Playtika Holding Corp is expected to generate 0.62 times more return on investment than Zhihu. However, Playtika Holding Corp is 1.61 times less risky than Zhihu. It trades about -0.01 of its potential returns per unit of risk. Zhihu Inc ADR is currently generating about -0.02 per unit of risk. If you would invest 1,043 in Playtika Holding Corp on August 31, 2024 and sell it today you would lose (201.00) from holding Playtika Holding Corp or give up 19.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtika Holding Corp vs. Zhihu Inc ADR
Performance |
| Timeline |
| Playtika Holding Corp |
| Zhihu Inc ADR |
Playtika Holding and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtika Holding and Zhihu
The main advantage of trading using opposite Playtika Holding and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Zhihu 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 Zhihu will offset losses from the drop in Zhihu's long position.| Playtika Holding vs. Doubledown Interactive Co | Playtika Holding vs. SohuCom | Playtika Holding vs. Playstudios | Playtika Holding vs. GDEV Inc |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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