Correlation Between First Quantum and PLAYTIKA HOLDING

Can any of the company-specific risk be diversified away by investing in both First Quantum 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 First Quantum and PLAYTIKA HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Quantum Minerals and PLAYTIKA HOLDING DL 01, you can compare the effects of market volatilities on First Quantum 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 First Quantum with a short position of PLAYTIKA HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Quantum and PLAYTIKA HOLDING.

Diversification Opportunities for First Quantum and PLAYTIKA HOLDING

0.26

Correlation Coefficient

First Quantum  PLAYTIKA HOLDING

Modest diversification

The 3 months correlation between First and PLAYTIKA is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding First Quantum Minerals and PLAYTIKA HOLDING DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTIKA HOLDING and First Quantum 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 First Quantum Minerals 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 has no effect on the direction of First Quantum i.e., First Quantum and PLAYTIKA HOLDING go up and down completely randomly.

Pair Corralation between First Quantum and PLAYTIKA HOLDING

Assuming the 90 days horizon First Quantum Minerals is expected to generate 1.6 times more return on investment than PLAYTIKA HOLDING. However, First Quantum is 1.6 times more volatile than PLAYTIKA HOLDING DL 01. It trades about 0.0 of its potential returns per unit of risk. PLAYTIKA HOLDING DL 01 is currently generating about -0.01 per unit of risk. If you would invest  2,081  in First Quantum Minerals on October 23, 2024 and sell it today you would lose (814.00) from holding First Quantum Minerals or give up 39.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

First Quantum Minerals  vs.  PLAYTIKA HOLDING DL 01

First Quantum Minerals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in First Quantum Minerals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, First Quantum may actually be approaching a critical reversion point that can send shares even higher in February 2025.

PLAYTIKA HOLDING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PLAYTIKA HOLDING DL 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PLAYTIKA HOLDING is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with First Quantum and PLAYTIKA HOLDING

The main advantage of trading using opposite First Quantum and PLAYTIKA HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Quantum 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 First Quantum Minerals and PLAYTIKA HOLDING DL 01 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.