Correlation Between Square Enix and Playtika Holding
Can any of the company-specific risk be diversified away by investing in both Square Enix 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 Square Enix and Playtika Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Square Enix Holdings and Playtika Holding Corp, you can compare the effects of market volatilities on Square Enix 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 Square Enix with a short position of Playtika Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Square Enix and Playtika Holding.
Diversification Opportunities for Square Enix and Playtika Holding
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Square and Playtika is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Square Enix Holdings 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 Square Enix 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 Square Enix Holdings 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 Square Enix i.e., Square Enix and Playtika Holding go up and down completely randomly.
Pair Corralation between Square Enix and Playtika Holding
Assuming the 90 days horizon Square Enix Holdings is expected to generate 1.76 times more return on investment than Playtika Holding. However, Square Enix is 1.76 times more volatile than Playtika Holding Corp. It trades about 0.09 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about 0.02 per unit of risk. If you would invest 2,986 in Square Enix Holdings on August 24, 2024 and sell it today you would earn a total of 1,063 from holding Square Enix Holdings or generate 35.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Square Enix Holdings vs. Playtika Holding Corp
Performance |
| Timeline |
| Square Enix Holdings |
| Playtika Holding Corp |
Square Enix and Playtika Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Square Enix and Playtika Holding
The main advantage of trading using opposite Square Enix and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Square Enix 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.| Square Enix vs. CD Projekt SA | Square Enix vs. Sega Sammy Holdings | Square Enix vs. Capcom Co Ltd | Square Enix vs. Embracer Group AB |
| 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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