Correlation Between PLAYTIKA HOLDING and Zhejiang Expressway

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

Diversification Opportunities for PLAYTIKA HOLDING and Zhejiang Expressway

-0.53

Correlation Coefficient

PLAYTIKA HOLDING  Zhejiang Expressway

Excellent diversification

The 3 months correlation between PLAYTIKA and Zhejiang is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and Zhejiang Expressway Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Expressway 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 Zhejiang Expressway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Expressway has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and Zhejiang Expressway go up and down completely randomly.

Pair Corralation between PLAYTIKA HOLDING and Zhejiang Expressway

Assuming the 90 days horizon PLAYTIKA HOLDING DL 01 is expected to under-perform the Zhejiang Expressway. In addition to that, PLAYTIKA HOLDING is 1.79 times more volatile than Zhejiang Expressway Co. It trades about -0.28 of its total potential returns per unit of risk. Zhejiang Expressway Co is currently generating about 0.06 per unit of volatility. If you would invest  67.00  in Zhejiang Expressway Co on December 24, 2024 and sell it today you would earn a total of  3.00  from holding Zhejiang Expressway Co or generate 4.48% 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.  Zhejiang Expressway Co

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.

Zhejiang Expressway

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zhejiang Expressway Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Zhejiang Expressway 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 Zhejiang Expressway

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

The idea behind PLAYTIKA HOLDING DL 01 and Zhejiang Expressway Co 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.

Check out your portfolio center.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.