Correlation Between Playa Hotels and Playtika Holding
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and Playtika Holding 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 Playa Hotels and Playtika Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playa Hotels Resorts and Playtika Holding Corp, you can compare the effects of market volatilities on Playa Hotels and Playtika Holding 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 Playa Hotels with a short position of Playtika Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Playtika Holding.
Diversification Opportunities for Playa Hotels and Playtika Holding
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Playa and Playtika is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Playtika Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtika Holding Corp and Playa Hotels 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 Playa Hotels Resorts are associated (or correlated) with Playtika Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtika Holding Corp has no effect on the direction of Playa Hotels i.e., Playa Hotels and Playtika Holding go up and down completely randomly.
Pair Corralation between Playa Hotels and Playtika Holding
Given the investment horizon of 90 days Playa Hotels Resorts is expected to generate 1.35 times more return on investment than Playtika Holding. However, Playa Hotels is 1.35 times more volatile than Playtika Holding Corp. It trades about 0.28 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about 0.09 per unit of risk. If you would invest 775.00 in Playa Hotels Resorts on August 30, 2024 and sell it today you would earn a total of 194.00 from holding Playa Hotels Resorts or generate 25.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playa Hotels Resorts vs. Playtika Holding Corp
Performance |
| Timeline |
| Playa Hotels Resorts |
| Playtika Holding Corp |
Playa Hotels and Playtika Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Playtika Holding
The main advantage of trading using opposite Playa Hotels and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, Playtika Holding 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 Playtika Holding will offset losses from the drop in Playtika Holding's long position.| Playa Hotels vs. Yatra Online | Playa Hotels vs. Despegar Corp | Playa Hotels vs. Mondee Holdings | Playa Hotels vs. MakeMyTrip Limited |
| Playtika Holding vs. SohuCom | Playtika Holding vs. Snail, Class A | Playtika Holding vs. Doubledown Interactive Co | Playtika Holding vs. i3 Interactive |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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