Correlation Between Jacobs Solutions and Playtika Holding

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

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

Diversification Opportunities for Jacobs Solutions and Playtika Holding

0.2

Correlation Coefficient

Jacobs Solutions  Playtika Holding

Modest diversification

The 3 months correlation between Jacobs and Playtika is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions 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 Jacobs Solutions 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 Jacobs Solutions 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 Jacobs Solutions i.e., Jacobs Solutions and Playtika Holding go up and down completely randomly.

Pair Corralation between Jacobs Solutions and Playtika Holding

Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 0.44 times more return on investment than Playtika Holding. However, Jacobs Solutions is 2.26 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 -0.48 per unit of risk. If you would invest  13,736  in Jacobs Solutions on September 23, 2024 and sell it today you would lose (161.00) from holding Jacobs Solutions or give up 1.17% of portfolio value over 90 days.

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

Jacobs Solutions  vs.  Playtika Holding Corp

Jacobs Solutions

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jacobs Solutions are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward-looking indicators, Jacobs Solutions may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 Jacobs Solutions and Playtika Holding

The main advantage of trading using opposite Jacobs Solutions and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions 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 Jacobs Solutions 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.