Correlation Between PLAYTIKA HOLDING and Westag Getalit

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

Diversification Opportunities for PLAYTIKA HOLDING and Westag Getalit

-0.57

Correlation Coefficient

PLAYTIKA HOLDING  Westag Getalit

Excellent diversification

The 3 months correlation between PLAYTIKA and Westag is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and Westag Getalit AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westag Getalit AG 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 Westag Getalit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westag Getalit AG has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and Westag Getalit go up and down completely randomly.

Pair Corralation between PLAYTIKA HOLDING and Westag Getalit

Assuming the 90 days horizon PLAYTIKA HOLDING DL 01 is expected to under-perform the Westag Getalit. But the stock apears to be less risky and, when comparing its historical volatility, PLAYTIKA HOLDING DL 01 is 1.27 times less risky than Westag Getalit. The stock trades about -0.15 of its potential returns per unit of risk. The Westag Getalit AG is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,400  in Westag Getalit AG on September 19, 2024 and sell it today you would earn a total of  20.00  from holding Westag Getalit AG or generate 0.83% return on investment over 90 days.

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

PLAYTIKA HOLDING DL 01  vs.  Westag Getalit AG

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Westag Getalit AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Westag Getalit AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Westag Getalit is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with PLAYTIKA HOLDING and Westag Getalit

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

The idea behind PLAYTIKA HOLDING DL 01 and Westag Getalit AG 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.