Correlation Between CaliberCos and Playstudios

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

By analyzing existing cross correlation between CaliberCos Class A and Playstudios, you can compare the effects of market volatilities on CaliberCos and Playstudios 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 CaliberCos with a short position of Playstudios. Check out your portfolio center. Please also check ongoing floating volatility patterns of CaliberCos and Playstudios.

Diversification Opportunities for CaliberCos and Playstudios

-0.64

Correlation Coefficient

CaliberCos  Playstudios

Excellent diversification

The 3 months correlation between CaliberCos and Playstudios is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding CaliberCos Class A and Playstudios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playstudios and CaliberCos 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 CaliberCos Class A are associated (or correlated) with Playstudios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playstudios has no effect on the direction of CaliberCos i.e., CaliberCos and Playstudios go up and down completely randomly.

Pair Corralation between CaliberCos and Playstudios

Considering the 90-day investment horizon CaliberCos Class A is expected to under-perform the Playstudios. In addition to that, CaliberCos is 1.61 times more volatile than Playstudios. It trades about -0.07 of its total potential returns per unit of risk. Playstudios is currently generating about -0.04 per unit of volatility. If you would invest  444.00  in Playstudios on October 11, 2024 and sell it today you would lose (267.00) from holding Playstudios or give up 60.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	83.64%
Values	Daily Returns

CaliberCos Class A  vs.  Playstudios

CaliberCos Class A

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CaliberCos Class A are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, CaliberCos exhibited solid returns over the last few months and may actually be approaching a breakup point.

Playstudios

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Playstudios are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Playstudios unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CaliberCos and Playstudios

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

The idea behind CaliberCos Class A and Playstudios 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.