Correlation Between ICC Holdings and Playtika Holding

Can any of the company-specific risk be diversified away by investing in both ICC 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 ICC 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 ICC Holdings and Playtika Holding Corp, you can compare the effects of market volatilities on ICC 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 ICC Holdings with a short position of Playtika Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICC Holdings and Playtika Holding.

Diversification Opportunities for ICC Holdings and Playtika Holding

0.32

Correlation Coefficient

ICC Holdings  Playtika Holding

Weak diversification

The 3 months correlation between ICC and Playtika is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding ICC 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 ICC 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 ICC 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 ICC Holdings i.e., ICC Holdings and Playtika Holding go up and down completely randomly.

Pair Corralation between ICC Holdings and Playtika Holding

Given the investment horizon of 90 days ICC Holdings is expected to generate 0.23 times more return on investment than Playtika Holding. However, ICC Holdings is 4.34 times less risky than Playtika Holding. It trades about 0.05 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about -0.35 per unit of risk. If you would invest  2,310  in ICC Holdings on September 19, 2024 and sell it today you would earn a total of  13.00  from holding ICC Holdings or generate 0.56% return on investment over 90 days.

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

ICC Holdings  vs.  Playtika Holding Corp

ICC Holdings

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ICC Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, ICC Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

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 inconsistent 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 ICC Holdings and Playtika Holding

The main advantage of trading using opposite ICC Holdings and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICC 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 ICC 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 Transaction History module to view history of all your transactions and understand their impact on performance.