Correlation Between DANIMER SCIENTIFIC and PLAYTIKA HOLDING

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

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

Diversification Opportunities for DANIMER SCIENTIFIC and PLAYTIKA HOLDING

-0.77

Correlation Coefficient

DANIMER SCIENTIFIC  PLAYTIKA HOLDING

Pay attention - limited upside

The 3 months correlation between DANIMER and PLAYTIKA is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding DANIMER SCIENTIFIC 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 DANIMER SCIENTIFIC 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 DANIMER SCIENTIFIC 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 DANIMER SCIENTIFIC i.e., DANIMER SCIENTIFIC and PLAYTIKA HOLDING go up and down completely randomly.

Pair Corralation between DANIMER SCIENTIFIC and PLAYTIKA HOLDING

Assuming the 90 days horizon DANIMER SCIENTIFIC is expected to under-perform the PLAYTIKA HOLDING. In addition to that, DANIMER SCIENTIFIC is 2.41 times more volatile than PLAYTIKA HOLDING DL 01. It trades about -0.03 of its total potential returns per unit of risk. PLAYTIKA HOLDING DL 01 is currently generating about 0.0 per unit of volatility. If you would invest  745.00  in PLAYTIKA HOLDING DL 01 on September 24, 2024 and sell it today you would lose (100.00) from holding PLAYTIKA HOLDING DL 01 or give up 13.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

DANIMER SCIENTIFIC  vs.  PLAYTIKA HOLDING DL 01

DANIMER SCIENTIFIC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DANIMER SCIENTIFIC 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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

PLAYTIKA HOLDING

Risk-Adjusted Performance

0 of 100

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 nearly stable basic indicators, PLAYTIKA HOLDING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with DANIMER SCIENTIFIC and PLAYTIKA HOLDING

The main advantage of trading using opposite DANIMER SCIENTIFIC and PLAYTIKA HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DANIMER SCIENTIFIC 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 DANIMER SCIENTIFIC 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.