Correlation Between PLAYTIKA HOLDING and Games Workshop

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

Diversification Opportunities for PLAYTIKA HOLDING and Games Workshop

0.51

Correlation Coefficient

PLAYTIKA HOLDING  Games Workshop

Very weak diversification

The 3 months correlation between PLAYTIKA and Games is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and Games Workshop Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Games Workshop Group 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 Games Workshop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Games Workshop Group has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and Games Workshop go up and down completely randomly.

Pair Corralation between PLAYTIKA HOLDING and Games Workshop

Assuming the 90 days horizon PLAYTIKA HOLDING DL 01 is expected to under-perform the Games Workshop. In addition to that, PLAYTIKA HOLDING is 1.12 times more volatile than Games Workshop Group. It trades about -0.01 of its total potential returns per unit of risk. Games Workshop Group is currently generating about 0.08 per unit of volatility. If you would invest  10,242  in Games Workshop Group on October 3, 2024 and sell it today you would earn a total of  5,408  from holding Games Workshop Group or generate 52.8% return on investment over 90 days.

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

PLAYTIKA HOLDING DL 01  vs.  Games Workshop Group

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.

Games Workshop Group

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Games Workshop Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Games Workshop unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PLAYTIKA HOLDING and Games Workshop

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

The idea behind PLAYTIKA HOLDING DL 01 and Games Workshop Group 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.