Correlation Between China Aircraft and Playtika Holding

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

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

Diversification Opportunities for China Aircraft and Playtika Holding

-0.61

Correlation Coefficient

China Aircraft  Playtika Holding

Excellent diversification

The 3 months correlation between China and Playtika is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding China Aircraft Leasing 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 China Aircraft 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 China Aircraft Leasing 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 China Aircraft i.e., China Aircraft and Playtika Holding go up and down completely randomly.

Pair Corralation between China Aircraft and Playtika Holding

Assuming the 90 days horizon China Aircraft Leasing is expected to under-perform the Playtika Holding. But the pink sheet apears to be less risky and, when comparing its historical volatility, China Aircraft Leasing is 1.7 times less risky than Playtika Holding. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Playtika Holding Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  730.00  in Playtika Holding Corp on September 12, 2024 and sell it today you would earn a total of  96.00  from holding Playtika Holding Corp or generate 13.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

China Aircraft Leasing  vs.  Playtika Holding Corp

China Aircraft Leasing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Aircraft Leasing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's essential 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

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Playtika Holding Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal basic indicators, Playtika Holding disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with China Aircraft and Playtika Holding

The main advantage of trading using opposite China Aircraft and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aircraft 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 China Aircraft Leasing 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.