Correlation Between GameSquare Holdings and Playtika Holding

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

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

Diversification Opportunities for GameSquare Holdings and Playtika Holding

0.7

Correlation Coefficient

GameSquare Holdings  Playtika Holding

Poor diversification

The 3 months correlation between GameSquare and Playtika is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding GameSquare Holdings 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 GameSquare Holdings 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 GameSquare Holdings 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 GameSquare Holdings i.e., GameSquare Holdings and Playtika Holding go up and down completely randomly.

Pair Corralation between GameSquare Holdings and Playtika Holding

Given the investment horizon of 90 days GameSquare Holdings is expected to generate 1.23 times more return on investment than Playtika Holding. However, GameSquare Holdings is 1.23 times more volatile than Playtika Holding Corp. It trades about -0.06 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about -0.09 per unit of risk. If you would invest  82.00  in GameSquare Holdings on December 30, 2024 and sell it today you would lose (20.00) from holding GameSquare Holdings or give up 24.39% of portfolio value over 90 days.

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

GameSquare Holdings  vs.  Playtika Holding Corp

GameSquare Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days GameSquare Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 GameSquare Holdings and Playtika Holding

The main advantage of trading using opposite GameSquare Holdings and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameSquare Holdings 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 GameSquare Holdings 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.