Correlation Between PLAYTIKA HOLDING and PLAYTECH

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

Diversification Opportunities for PLAYTIKA HOLDING and PLAYTECH

0.05

Correlation Coefficient

PLAYTIKA HOLDING  PLAYTECH

Significant diversification

The 3 months correlation between PLAYTIKA and PLAYTECH is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and PLAYTECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTECH 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 PLAYTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYTECH has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and PLAYTECH go up and down completely randomly.

Pair Corralation between PLAYTIKA HOLDING and PLAYTECH

Assuming the 90 days horizon PLAYTIKA HOLDING DL 01 is expected to under-perform the PLAYTECH. In addition to that, PLAYTIKA HOLDING is 1.74 times more volatile than PLAYTECH. It trades about -0.28 of its total potential returns per unit of risk. PLAYTECH is currently generating about 0.06 per unit of volatility. If you would invest  845.00  in PLAYTECH on December 24, 2024 and sell it today you would earn a total of  41.00  from holding PLAYTECH or generate 4.85% return on investment over 90 days.

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

PLAYTIKA HOLDING DL 01  vs.  PLAYTECH

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.

PLAYTECH

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PLAYTECH are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, PLAYTECH is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with PLAYTIKA HOLDING and PLAYTECH

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

The idea behind PLAYTIKA HOLDING DL 01 and PLAYTECH 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.