Correlation Between PLAYTIKA HOLDING and INSURANCE AUST

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

Diversification Opportunities for PLAYTIKA HOLDING and INSURANCE AUST

0.78

Correlation Coefficient

PLAYTIKA HOLDING  INSURANCE AUST

Poor diversification

The 3 months correlation between PLAYTIKA and INSURANCE is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and INSURANCE AUST GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INSURANCE AUST GRP 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 INSURANCE AUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INSURANCE AUST GRP has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and INSURANCE AUST go up and down completely randomly.

Pair Corralation between PLAYTIKA HOLDING and INSURANCE AUST

Assuming the 90 days horizon PLAYTIKA HOLDING DL 01 is expected to under-perform the INSURANCE AUST. In addition to that, PLAYTIKA HOLDING is 1.22 times more volatile than INSURANCE AUST GRP. It trades about -0.29 of its total potential returns per unit of risk. INSURANCE AUST GRP is currently generating about -0.07 per unit of volatility. If you would invest  486.00  in INSURANCE AUST GRP on December 23, 2024 and sell it today you would lose (52.00) from holding INSURANCE AUST GRP or give up 10.7% of portfolio value over 90 days.

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

PLAYTIKA HOLDING DL 01  vs.  INSURANCE AUST GRP

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 fragile 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.

INSURANCE AUST GRP

Risk-Adjusted Performance

Very Weak

Over the last 90 days INSURANCE AUST GRP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's primary 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 INSURANCE AUST

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

The idea behind PLAYTIKA HOLDING DL 01 and INSURANCE AUST GRP 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 Commodity Directory module to find actively traded commodities issued by global exchanges.