Correlation Between Sega Sammy and Playstudios

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

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

Diversification Opportunities for Sega Sammy and Playstudios

-0.71

Correlation Coefficient

Sega Sammy  Playstudios

Pay attention - limited upside

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

Pair Corralation between Sega Sammy and Playstudios

Assuming the 90 days horizon Sega Sammy Holdings is expected to under-perform the Playstudios. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sega Sammy Holdings is 1.45 times less risky than Playstudios. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Playstudios is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  163.00  in Playstudios on September 13, 2024 and sell it today you would earn a total of  60.00  from holding Playstudios or generate 36.81% return on investment over 90 days.

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

Sega Sammy Holdings  vs.  Playstudios

Sega Sammy Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sega Sammy Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Playstudios

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Playstudios are ranked lower than 12 (%) 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 Sega Sammy and Playstudios

The main advantage of trading using opposite Sega Sammy and Playstudios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sega Sammy 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 Sega Sammy 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.