Correlation Between AKITA Drilling and Playtika Holding

Can any of the company-specific risk be diversified away by investing in both AKITA Drilling and Playtika Holding 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 AKITA Drilling and Playtika Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AKITA Drilling and Playtika Holding Corp, you can compare the effects of market volatilities on AKITA Drilling and Playtika Holding 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 AKITA Drilling with a short position of Playtika Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKITA Drilling and Playtika Holding.

Diversification Opportunities for AKITA Drilling and Playtika Holding

0.22

Correlation Coefficient

AKITA Drilling  Playtika Holding

Modest diversification

The 3 months correlation between AKITA and Playtika is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling and Playtika Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtika Holding Corp and AKITA Drilling 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 AKITA Drilling are associated (or correlated) with Playtika Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtika Holding Corp has no effect on the direction of AKITA Drilling i.e., AKITA Drilling and Playtika Holding go up and down completely randomly.

Pair Corralation between AKITA Drilling and Playtika Holding

Assuming the 90 days horizon AKITA Drilling is expected to generate 0.49 times more return on investment than Playtika Holding. However, AKITA Drilling is 2.04 times less risky than Playtika Holding. It trades about -0.14 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about -0.39 per unit of risk. If you would invest  113.00  in AKITA Drilling on December 5, 2024 and sell it today you would lose (7.00) from holding AKITA Drilling or give up 6.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

AKITA Drilling  vs.  Playtika Holding Corp

AKITA Drilling

Risk-Adjusted Performance

Very Weak

Over the last 90 days AKITA Drilling has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Playtika Holding Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Playtika Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with AKITA Drilling and Playtika Holding

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

The idea behind AKITA Drilling and Playtika Holding Corp 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.