Correlation Between PLAYTIKA HOLDING and STORA ENSO
Can any of the company-specific risk be diversified away by investing in both PLAYTIKA HOLDING and STORA ENSO 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 STORA ENSO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYTIKA HOLDING DL 01 and STORA ENSO OYJ, you can compare the effects of market volatilities on PLAYTIKA HOLDING and STORA ENSO 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 STORA ENSO. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYTIKA HOLDING and STORA ENSO.
Diversification Opportunities for PLAYTIKA HOLDING and STORA ENSO
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PLAYTIKA and STORA is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and STORA ENSO OYJ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORA ENSO OYJ 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 DL 01 are associated (or correlated) with STORA ENSO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORA ENSO OYJ has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and STORA ENSO go up and down completely randomly.
Pair Corralation between PLAYTIKA HOLDING and STORA ENSO
Assuming the 90 days horizon PLAYTIKA HOLDING DL 01 is expected to under-perform the STORA ENSO. In addition to that, PLAYTIKA HOLDING is 1.13 times more volatile than STORA ENSO OYJ. It trades about -0.25 of its total potential returns per unit of risk. STORA ENSO OYJ is currently generating about 0.09 per unit of volatility. If you would invest 918.00 in STORA ENSO OYJ on December 4, 2024 and sell it today you would earn a total of 107.00 from holding STORA ENSO OYJ or generate 11.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.33% |
Values | Daily Returns |
PLAYTIKA HOLDING DL 01 vs. STORA ENSO OYJ
Performance |
Timeline |
PLAYTIKA HOLDING |
STORA ENSO OYJ |
PLAYTIKA HOLDING and STORA ENSO Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PLAYTIKA HOLDING and STORA ENSO
The main advantage of trading using opposite PLAYTIKA HOLDING and STORA ENSO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYTIKA HOLDING position performs unexpectedly, STORA ENSO 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 STORA ENSO will offset losses from the drop in STORA ENSO's long position.PLAYTIKA HOLDING vs. Yanzhou Coal Mining | PLAYTIKA HOLDING vs. Fair Value Reit | PLAYTIKA HOLDING vs. RYANAIR HLDGS ADR | PLAYTIKA HOLDING vs. MINCO SILVER |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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