Correlation Between Franklin Credit and Playtika Holding

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

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

Diversification Opportunities for Franklin Credit and Playtika Holding

0.1

Correlation Coefficient

Franklin Credit  Playtika Holding

Average diversification

The 3 months correlation between Franklin and Playtika is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Credit Management 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 Franklin Credit 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 Franklin Credit Management 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 Franklin Credit i.e., Franklin Credit and Playtika Holding go up and down completely randomly.

Pair Corralation between Franklin Credit and Playtika Holding

Given the investment horizon of 90 days Franklin Credit Management is expected to generate 4.74 times more return on investment than Playtika Holding. However, Franklin Credit is 4.74 times more volatile than Playtika Holding Corp. It trades about 0.04 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about 0.0 per unit of risk. If you would invest  25.00  in Franklin Credit Management on September 20, 2024 and sell it today you would lose (14.00) from holding Franklin Credit Management or give up 56.0% of portfolio value over 90 days.

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

Franklin Credit Management  vs.  Playtika Holding Corp

Franklin Credit Mana

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Credit Management are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Franklin Credit displayed solid returns over the last few months and may actually be approaching a breakup point.

Playtika Holding Corp

Risk-Adjusted Performance

0 of 100

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 latest uncertain performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Franklin Credit and Playtika Holding

The main advantage of trading using opposite Franklin Credit and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Credit 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 Franklin Credit Management 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.