Correlation Between PLAYTIKA HOLDING and COMPUGROUP MEDSPADR

Can any of the company-specific risk be diversified away by investing in both PLAYTIKA HOLDING and COMPUGROUP MEDSPADR 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 COMPUGROUP MEDSPADR 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 COMPUGROUP MEDSPADR 1, you can compare the effects of market volatilities on PLAYTIKA HOLDING and COMPUGROUP MEDSPADR 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 COMPUGROUP MEDSPADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYTIKA HOLDING and COMPUGROUP MEDSPADR.

Diversification Opportunities for PLAYTIKA HOLDING and COMPUGROUP MEDSPADR

-0.02

Correlation Coefficient

PLAYTIKA HOLDING  COMPUGROUP MEDSPADR

Good diversification

The 3 months correlation between PLAYTIKA and COMPUGROUP is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and COMPUGROUP MEDSPADR 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMPUGROUP MEDSPADR 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 COMPUGROUP MEDSPADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMPUGROUP MEDSPADR has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and COMPUGROUP MEDSPADR go up and down completely randomly.

Pair Corralation between PLAYTIKA HOLDING and COMPUGROUP MEDSPADR

Assuming the 90 days horizon PLAYTIKA HOLDING DL 01 is expected to under-perform the COMPUGROUP MEDSPADR. In addition to that, PLAYTIKA HOLDING is 1.24 times more volatile than COMPUGROUP MEDSPADR 1. It trades about -0.36 of its total potential returns per unit of risk. COMPUGROUP MEDSPADR 1 is currently generating about -0.07 per unit of volatility. If you would invest  2,160  in COMPUGROUP MEDSPADR 1 on October 9, 2024 and sell it today you would lose (60.00) from holding COMPUGROUP MEDSPADR 1 or give up 2.78% of portfolio value over 90 days.

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

PLAYTIKA HOLDING DL 01  vs.  COMPUGROUP MEDSPADR 1

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.

COMPUGROUP MEDSPADR

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in COMPUGROUP MEDSPADR 1 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, COMPUGROUP MEDSPADR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PLAYTIKA HOLDING and COMPUGROUP MEDSPADR

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

The idea behind PLAYTIKA HOLDING DL 01 and COMPUGROUP MEDSPADR 1 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.