Correlation Between Park Ohio and Playstudios

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

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

Diversification Opportunities for Park Ohio and Playstudios

0.04

Correlation Coefficient

Park Ohio  Playstudios

Significant diversification

The 3 months correlation between Park and Playstudios is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Park Ohio Holdings and Playstudios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playstudios and Park Ohio 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 Park Ohio Holdings 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 Park Ohio i.e., Park Ohio and Playstudios go up and down completely randomly.

Pair Corralation between Park Ohio and Playstudios

Given the investment horizon of 90 days Park Ohio Holdings is expected to generate 0.72 times more return on investment than Playstudios. However, Park Ohio Holdings is 1.38 times less risky than Playstudios. It trades about 0.03 of its potential returns per unit of risk. Playstudios is currently generating about -0.01 per unit of risk. If you would invest  2,311  in Park Ohio Holdings on September 28, 2024 and sell it today you would earn a total of  272.00  from holding Park Ohio Holdings or generate 11.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.63%
Values	Daily Returns

Park Ohio Holdings  vs.  Playstudios

Park Ohio Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Park Ohio Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Playstudios

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Playstudios are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Playstudios unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Park Ohio and Playstudios

The main advantage of trading using opposite Park Ohio and Playstudios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Ohio 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 Park Ohio Holdings 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.