Correlation Between Under Armour and Playtika Holding
Can any of the company-specific risk be diversified away by investing in both Under Armour 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 Under Armour and Playtika Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Under Armour C and Playtika Holding Corp, you can compare the effects of market volatilities on Under Armour 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 Under Armour with a short position of Playtika Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Under Armour and Playtika Holding.
Diversification Opportunities for Under Armour and Playtika Holding
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Under and Playtika is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Under Armour C 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 Under Armour 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 Under Armour C 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 Under Armour i.e., Under Armour and Playtika Holding go up and down completely randomly.
Pair Corralation between Under Armour and Playtika Holding
Allowing for the 90-day total investment horizon Under Armour C is expected to generate 2.07 times more return on investment than Playtika Holding. However, Under Armour is 2.07 times more volatile than Playtika Holding Corp. It trades about 0.07 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about 0.0 per unit of risk. If you would invest 681.00 in Under Armour C on September 2, 2024 and sell it today you would earn a total of 196.00 from holding Under Armour C or generate 28.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Under Armour C vs. Playtika Holding Corp
Performance |
| Timeline |
| Under Armour C |
| Playtika Holding Corp |
Under Armour and Playtika Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Under Armour and Playtika Holding
The main advantage of trading using opposite Under Armour and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Under Armour 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.| Under Armour vs. Levi Strauss Co | Under Armour vs. Columbia Sportswear | Under Armour vs. Hanesbrands | Under Armour vs. PVH Corp |
| Playtika Holding vs. Gravity Co | Playtika Holding vs. NetEase | Playtika Holding vs. Snail, Class A | Playtika Holding vs. GameSquare Holdings |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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