Correlation Between PLAYTIKA HOLDING and Traton SE

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

Diversification Opportunities for PLAYTIKA HOLDING and Traton SE

0.15

Correlation Coefficient

PLAYTIKA HOLDING  Traton SE

Average diversification

The 3 months correlation between PLAYTIKA and Traton is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and Traton SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Traton SE 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 Traton SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Traton SE has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and Traton SE go up and down completely randomly.

Pair Corralation between PLAYTIKA HOLDING and Traton SE

Assuming the 90 days horizon PLAYTIKA HOLDING DL 01 is expected to generate 1.16 times more return on investment than Traton SE. However, PLAYTIKA HOLDING is 1.16 times more volatile than Traton SE. It trades about 0.21 of its potential returns per unit of risk. Traton SE is currently generating about -0.05 per unit of risk. If you would invest  715.00  in PLAYTIKA HOLDING DL 01 on September 5, 2024 and sell it today you would earn a total of  80.00  from holding PLAYTIKA HOLDING DL 01 or generate 11.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

PLAYTIKA HOLDING DL 01  vs.  Traton SE

PLAYTIKA HOLDING

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PLAYTIKA HOLDING DL 01 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PLAYTIKA HOLDING reported solid returns over the last few months and may actually be approaching a breakup point.

Traton SE

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Traton SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Traton SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PLAYTIKA HOLDING and Traton SE

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

The idea behind PLAYTIKA HOLDING DL 01 and Traton SE 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.