Correlation Between PLAYSTUDIOS and InterContinental

Can any of the company-specific risk be diversified away by investing in both PLAYSTUDIOS and InterContinental 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 PLAYSTUDIOS and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PLAYSTUDIOS A DL 0001 and InterContinental Hotels Group, you can compare the effects of market volatilities on PLAYSTUDIOS and InterContinental 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 PLAYSTUDIOS with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYSTUDIOS and InterContinental.

Diversification Opportunities for PLAYSTUDIOS and InterContinental

0.91

Correlation Coefficient

PLAYSTUDIOS  InterContinental

Almost no diversification

The 3 months correlation between PLAYSTUDIOS and InterContinental is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding PLAYSTUDIOS A DL 0001 and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and PLAYSTUDIOS 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 PLAYSTUDIOS A DL 0001 are associated (or correlated) with InterContinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterContinental Hotels has no effect on the direction of PLAYSTUDIOS i.e., PLAYSTUDIOS and InterContinental go up and down completely randomly.

Pair Corralation between PLAYSTUDIOS and InterContinental

Assuming the 90 days horizon PLAYSTUDIOS A DL 0001 is expected to generate 2.64 times more return on investment than InterContinental. However, PLAYSTUDIOS is 2.64 times more volatile than InterContinental Hotels Group. It trades about 0.23 of its potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.26 per unit of risk. If you would invest  125.00  in PLAYSTUDIOS A DL 0001 on October 6, 2024 and sell it today you would earn a total of  56.00  from holding PLAYSTUDIOS A DL 0001 or generate 44.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

PLAYSTUDIOS A DL 0001  vs.  InterContinental Hotels Group

PLAYSTUDIOS A DL

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PLAYSTUDIOS A DL 0001 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PLAYSTUDIOS reported solid returns over the last few months and may actually be approaching a breakup point.

InterContinental Hotels

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in InterContinental Hotels Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, InterContinental reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PLAYSTUDIOS and InterContinental

The main advantage of trading using opposite PLAYSTUDIOS and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYSTUDIOS position performs unexpectedly, InterContinental 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 InterContinental will offset losses from the drop in InterContinental's long position.

The idea behind PLAYSTUDIOS A DL 0001 and InterContinental Hotels Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Anywhere module to track or share privately all of your investments from the convenience of any device.