Correlation Between GD Culture and PLAYSTUDIOS

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

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

Diversification Opportunities for GD Culture and PLAYSTUDIOS

-0.71

Correlation Coefficient

GD Culture  PLAYSTUDIOS

Pay attention - limited upside

The 3 months correlation between GDC and PLAYSTUDIOS is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding GD Culture Group and PLAYSTUDIOS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYSTUDIOS and GD Culture 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 GD Culture Group 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 GD Culture i.e., GD Culture and PLAYSTUDIOS go up and down completely randomly.

Pair Corralation between GD Culture and PLAYSTUDIOS

Considering the 90-day investment horizon GD Culture Group is expected to generate 0.6 times more return on investment than PLAYSTUDIOS. However, GD Culture Group is 1.67 times less risky than PLAYSTUDIOS. It trades about 0.09 of its potential returns per unit of risk. PLAYSTUDIOS is currently generating about -0.02 per unit of risk. If you would invest  193.00  in GD Culture Group on December 29, 2024 and sell it today you would earn a total of  58.00  from holding GD Culture Group or generate 30.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

GD Culture Group  vs.  PLAYSTUDIOS

GD Culture Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GD Culture Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, GD Culture exhibited solid returns over the last few months and may actually be approaching a breakup point.

PLAYSTUDIOS

Risk-Adjusted Performance

Very Weak

Over the last 90 days PLAYSTUDIOS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with GD Culture and PLAYSTUDIOS

The main advantage of trading using opposite GD Culture and PLAYSTUDIOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GD Culture 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's long position.

The idea behind GD Culture Group 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..