Correlation Between PLAYTIKA HOLDING and FEMALE HEALTH

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

Diversification Opportunities for PLAYTIKA HOLDING and FEMALE HEALTH

-0.61

Correlation Coefficient

PLAYTIKA HOLDING  FEMALE HEALTH

Excellent diversification

The 3 months correlation between PLAYTIKA and FEMALE is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and FEMALE HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEMALE HEALTH 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 FEMALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEMALE HEALTH has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and FEMALE HEALTH go up and down completely randomly.

Pair Corralation between PLAYTIKA HOLDING and FEMALE HEALTH

Assuming the 90 days horizon PLAYTIKA HOLDING DL 01 is expected to generate 0.53 times more return on investment than FEMALE HEALTH. However, PLAYTIKA HOLDING DL 01 is 1.88 times less risky than FEMALE HEALTH. It trades about -0.01 of its potential returns per unit of risk. FEMALE HEALTH is currently generating about -0.01 per unit of risk. If you would invest  714.00  in PLAYTIKA HOLDING DL 01 on September 22, 2024 and sell it today you would lose (49.00) from holding PLAYTIKA HOLDING DL 01 or give up 6.86% of portfolio value over 90 days.

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

PLAYTIKA HOLDING DL 01  vs.  FEMALE HEALTH

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.

FEMALE HEALTH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FEMALE HEALTH has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with PLAYTIKA HOLDING and FEMALE HEALTH

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

The idea behind PLAYTIKA HOLDING DL 01 and FEMALE HEALTH 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.