Correlation Between PLAYTIKA HOLDING and KAGA EL

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

Diversification Opportunities for PLAYTIKA HOLDING and KAGA EL

-0.44

Correlation Coefficient

PLAYTIKA HOLDING  KAGA EL

Very good diversification

The 3 months correlation between PLAYTIKA and KAGA is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and KAGA EL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAGA EL LTD 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 KAGA EL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAGA EL LTD has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and KAGA EL go up and down completely randomly.

Pair Corralation between PLAYTIKA HOLDING and KAGA EL

Assuming the 90 days horizon PLAYTIKA HOLDING DL 01 is expected to under-perform the KAGA EL. In addition to that, PLAYTIKA HOLDING is 1.54 times more volatile than KAGA EL LTD. It trades about -0.41 of its total potential returns per unit of risk. KAGA EL LTD is currently generating about 0.15 per unit of volatility. If you would invest  1,650  in KAGA EL LTD on September 23, 2024 and sell it today you would earn a total of  80.00  from holding KAGA EL LTD or generate 4.85% return on investment over 90 days.

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

PLAYTIKA HOLDING DL 01  vs.  KAGA EL LTD

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

KAGA EL LTD

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KAGA EL LTD are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, KAGA EL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PLAYTIKA HOLDING and KAGA EL

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

The idea behind PLAYTIKA HOLDING DL 01 and KAGA EL LTD 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.