Correlation Between PLAYTIKA HOLDING and VIAPLAY GROUP

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

Diversification Opportunities for PLAYTIKA HOLDING and VIAPLAY GROUP

-0.13

Correlation Coefficient

PLAYTIKA HOLDING  VIAPLAY GROUP

Good diversification

The 3 months correlation between PLAYTIKA and VIAPLAY is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and VIAPLAY GROUP AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIAPLAY GROUP AB 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 VIAPLAY GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIAPLAY GROUP AB has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and VIAPLAY GROUP go up and down completely randomly.

Pair Corralation between PLAYTIKA HOLDING and VIAPLAY GROUP

Assuming the 90 days horizon PLAYTIKA HOLDING is expected to generate 2.21 times less return on investment than VIAPLAY GROUP. But when comparing it to its historical volatility, PLAYTIKA HOLDING DL 01 is 2.26 times less risky than VIAPLAY GROUP. It trades about 0.02 of its potential returns per unit of risk. VIAPLAY GROUP AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  5.78  in VIAPLAY GROUP AB on October 13, 2024 and sell it today you would lose (0.17) from holding VIAPLAY GROUP AB or give up 2.94% 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.  VIAPLAY GROUP AB

PLAYTIKA HOLDING

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PLAYTIKA HOLDING DL 01 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

VIAPLAY GROUP AB

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VIAPLAY GROUP AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, VIAPLAY GROUP 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 VIAPLAY GROUP

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

The idea behind PLAYTIKA HOLDING DL 01 and VIAPLAY GROUP AB 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.