Correlation Between PLAYTIKA HOLDING and C PARAN

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

Diversification Opportunities for PLAYTIKA HOLDING and C PARAN

-0.27

Correlation Coefficient

PLAYTIKA HOLDING  C PARAN

Very good diversification

The 3 months correlation between PLAYTIKA and ELP1 is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and C PARAN EN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C PARAN EN 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 C PARAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C PARAN EN has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and C PARAN go up and down completely randomly.

Pair Corralation between PLAYTIKA HOLDING and C PARAN

Assuming the 90 days horizon PLAYTIKA HOLDING DL 01 is expected to under-perform the C PARAN. In addition to that, PLAYTIKA HOLDING is 1.62 times more volatile than C PARAN EN. It trades about -0.23 of its total potential returns per unit of risk. C PARAN EN is currently generating about 0.16 per unit of volatility. If you would invest  565.00  in C PARAN EN on December 22, 2024 and sell it today you would earn a total of  95.00  from holding C PARAN EN or generate 16.81% return on investment over 90 days.

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

PLAYTIKA HOLDING DL 01  vs.  C PARAN EN

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 unsteady 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.

C PARAN EN

Risk-Adjusted Performance

Good

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

Pair Trading with PLAYTIKA HOLDING and C PARAN

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

The idea behind PLAYTIKA HOLDING DL 01 and C PARAN EN 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.