Correlation Between PLAYTIKA HOLDING and DANIMER SCIENTIFIC

Can any of the company-specific risk be diversified away by investing in both PLAYTIKA HOLDING and DANIMER SCIENTIFIC 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 DANIMER SCIENTIFIC 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 DANIMER SCIENTIFIC, you can compare the effects of market volatilities on PLAYTIKA HOLDING and DANIMER SCIENTIFIC 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 DANIMER SCIENTIFIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYTIKA HOLDING and DANIMER SCIENTIFIC.

Diversification Opportunities for PLAYTIKA HOLDING and DANIMER SCIENTIFIC

-0.52

Correlation Coefficient

PLAYTIKA HOLDING  DANIMER SCIENTIFIC

Excellent diversification

The 3 months correlation between PLAYTIKA and DANIMER is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and DANIMER SCIENTIFIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DANIMER SCIENTIFIC 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 DANIMER SCIENTIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DANIMER SCIENTIFIC has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and DANIMER SCIENTIFIC go up and down completely randomly.

Pair Corralation between PLAYTIKA HOLDING and DANIMER SCIENTIFIC

If you would invest  850.00  in DANIMER SCIENTIFIC on October 13, 2024 and sell it today you would earn a total of  0.00  from holding DANIMER SCIENTIFIC or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.12%
Values	Daily Returns

PLAYTIKA HOLDING DL 01  vs.  DANIMER SCIENTIFIC

PLAYTIKA HOLDING

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PLAYTIKA HOLDING DL 01 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

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 February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with PLAYTIKA HOLDING and DANIMER SCIENTIFIC

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

The idea behind PLAYTIKA HOLDING DL 01 and DANIMER SCIENTIFIC 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.