Correlation Between PLAYTIKA HOLDING and Japan Real

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

Diversification Opportunities for PLAYTIKA HOLDING and Japan Real

0.24

Correlation Coefficient

PLAYTIKA HOLDING  Japan Real

Modest diversification

The 3 months correlation between PLAYTIKA and Japan is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and Japan Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Real Estate 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 Japan Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Real Estate has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and Japan Real go up and down completely randomly.

Pair Corralation between PLAYTIKA HOLDING and Japan Real

Assuming the 90 days horizon PLAYTIKA HOLDING DL 01 is expected to under-perform the Japan Real. In addition to that, PLAYTIKA HOLDING is 1.89 times more volatile than Japan Real Estate. It trades about -0.25 of its total potential returns per unit of risk. Japan Real Estate is currently generating about 0.0 per unit of volatility. If you would invest  64,800  in Japan Real Estate on December 21, 2024 and sell it today you would lose (300.00) from holding Japan Real Estate or give up 0.46% of portfolio value over 90 days.

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

PLAYTIKA HOLDING DL 01  vs.  Japan Real Estate

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 weak 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.

Japan Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Japan Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Japan Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PLAYTIKA HOLDING and Japan Real

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

The idea behind PLAYTIKA HOLDING DL 01 and Japan Real Estate 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.