Correlation Between PLAYTIKA HOLDING and Western Copper

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

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

Diversification Opportunities for PLAYTIKA HOLDING and Western Copper

0.39

Correlation Coefficient

PLAYTIKA HOLDING  Western Copper

Weak diversification

The 3 months correlation between PLAYTIKA and Western is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 DL 01 are associated (or correlated) with Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and Western Copper go up and down completely randomly.

Pair Corralation between PLAYTIKA HOLDING and Western Copper

Assuming the 90 days horizon PLAYTIKA HOLDING DL 01 is expected to under-perform the Western Copper. But the stock apears to be less risky and, when comparing its historical volatility, PLAYTIKA HOLDING DL 01 is 1.26 times less risky than Western Copper. The stock trades about -0.29 of its potential returns per unit of risk. The Western Copper and is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  97.00  in Western Copper and on December 23, 2024 and sell it today you would earn a total of  6.00  from holding Western Copper and or generate 6.19% return on investment over 90 days.

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

PLAYTIKA HOLDING DL 01  vs.  Western Copper and

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.

Western Copper

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Western Copper and are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Western Copper may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with PLAYTIKA HOLDING and Western Copper

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

The idea behind PLAYTIKA HOLDING DL 01 and Western Copper and 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.