Correlation Between Goldman Sachs and Playtika Holding

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

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

Diversification Opportunities for Goldman Sachs and Playtika Holding

-0.41

Correlation Coefficient

Goldman Sachs  Playtika Holding

Very good diversification

The 3 months correlation between Goldman and Playtika is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Capital 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 Goldman Sachs 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 Goldman Sachs Capital 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 Goldman Sachs i.e., Goldman Sachs and Playtika Holding go up and down completely randomly.

Pair Corralation between Goldman Sachs and Playtika Holding

Considering the 90-day investment horizon Goldman Sachs Capital is expected to generate 0.83 times more return on investment than Playtika Holding. However, Goldman Sachs Capital is 1.2 times less risky than Playtika Holding. It trades about 0.04 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about -0.02 per unit of risk. If you would invest  2,308  in Goldman Sachs Capital on October 5, 2024 and sell it today you would earn a total of  350.00  from holding Goldman Sachs Capital or generate 15.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	87.42%
Values	Daily Returns

Goldman Sachs Capital  vs.  Playtika Holding Corp

Goldman Sachs Capital

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Capital are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, Goldman Sachs is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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 Goldman Sachs and Playtika Holding

The main advantage of trading using opposite Goldman Sachs and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs 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 Goldman Sachs Capital 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.