Correlation Between REGAL ASIAN and PLAYTIKA HOLDING

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

By analyzing existing cross correlation between REGAL ASIAN INVESTMENTS and PLAYTIKA HOLDING DL 01, you can compare the effects of market volatilities on REGAL ASIAN and PLAYTIKA HOLDING 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 REGAL ASIAN with a short position of PLAYTIKA HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and PLAYTIKA HOLDING.

Diversification Opportunities for REGAL ASIAN and PLAYTIKA HOLDING

0.65

Correlation Coefficient

REGAL ASIAN  PLAYTIKA HOLDING

Poor diversification

The 3 months correlation between REGAL and PLAYTIKA is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and PLAYTIKA HOLDING DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTIKA HOLDING and REGAL ASIAN 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 REGAL ASIAN INVESTMENTS are associated (or correlated) with PLAYTIKA HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYTIKA HOLDING has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and PLAYTIKA HOLDING go up and down completely randomly.

Pair Corralation between REGAL ASIAN and PLAYTIKA HOLDING

Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to generate 0.42 times more return on investment than PLAYTIKA HOLDING. However, REGAL ASIAN INVESTMENTS is 2.38 times less risky than PLAYTIKA HOLDING. It trades about -0.11 of its potential returns per unit of risk. PLAYTIKA HOLDING DL 01 is currently generating about -0.11 per unit of risk. If you would invest  121.00  in REGAL ASIAN INVESTMENTS on December 30, 2024 and sell it today you would lose (13.00) from holding REGAL ASIAN INVESTMENTS or give up 10.74% of portfolio value over 90 days.

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

REGAL ASIAN INVESTMENTS  vs.  PLAYTIKA HOLDING DL 01

REGAL ASIAN INVESTMENTS

Risk-Adjusted Performance

Very Weak

Over the last 90 days REGAL ASIAN INVESTMENTS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

PLAYTIKA HOLDING

Risk-Adjusted Performance

Very Weak

Over the last 90 days PLAYTIKA HOLDING DL 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with REGAL ASIAN and PLAYTIKA HOLDING

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

The idea behind REGAL ASIAN INVESTMENTS and PLAYTIKA HOLDING DL 01 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.