Correlation Between Playtika Holding and Ambev SA
Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Ambev SA 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 Ambev SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtika Holding Corp and Ambev SA ADR, you can compare the effects of market volatilities on Playtika Holding and Ambev SA 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 Ambev SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Ambev SA.
Diversification Opportunities for Playtika Holding and Ambev SA
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Playtika and Ambev is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Ambev SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambev SA ADR 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 Corp are associated (or correlated) with Ambev SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambev SA ADR has no effect on the direction of Playtika Holding i.e., Playtika Holding and Ambev SA go up and down completely randomly.
Pair Corralation between Playtika Holding and Ambev SA
Given the investment horizon of 90 days Playtika Holding Corp is expected to generate 1.56 times more return on investment than Ambev SA. However, Playtika Holding is 1.56 times more volatile than Ambev SA ADR. It trades about 0.0 of its potential returns per unit of risk. Ambev SA ADR is currently generating about -0.01 per unit of risk. If you would invest 830.00 in Playtika Holding Corp on September 24, 2024 and sell it today you would lose (145.00) from holding Playtika Holding Corp or give up 17.47% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Playtika Holding Corp vs. Ambev SA ADR
Performance |
Timeline |
Playtika Holding Corp |
Ambev SA ADR |
Playtika Holding and Ambev SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Playtika Holding and Ambev SA
The main advantage of trading using opposite Playtika Holding and Ambev SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Ambev SA 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 Ambev SA will offset losses from the drop in Ambev SA's long position.Playtika Holding vs. Doubledown Interactive Co | Playtika Holding vs. SohuCom | Playtika Holding vs. Playstudios | Playtika Holding vs. GDEV Inc |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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