Correlation Between EHEALTH and PLAYTIKA HOLDING

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

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

Diversification Opportunities for EHEALTH and PLAYTIKA HOLDING

0.81

Correlation Coefficient

EHEALTH  PLAYTIKA HOLDING

Very poor diversification

The 3 months correlation between EHEALTH and PLAYTIKA is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding EHEALTH 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 EHEALTH 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 EHEALTH 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 EHEALTH i.e., EHEALTH and PLAYTIKA HOLDING go up and down completely randomly.

Pair Corralation between EHEALTH and PLAYTIKA HOLDING

Assuming the 90 days trading horizon EHEALTH is expected to generate 1.86 times more return on investment than PLAYTIKA HOLDING. However, EHEALTH is 1.86 times more volatile than PLAYTIKA HOLDING DL 01. It trades about 0.19 of its potential returns per unit of risk. PLAYTIKA HOLDING DL 01 is currently generating about 0.15 per unit of risk. If you would invest  339.00  in EHEALTH on September 5, 2024 and sell it today you would earn a total of  191.00  from holding EHEALTH or generate 56.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.46%
Values	Daily Returns

EHEALTH  vs.  PLAYTIKA HOLDING DL 01

EHEALTH

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EHEALTH are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, EHEALTH exhibited solid returns over the last few months and may actually be approaching a breakup point.

PLAYTIKA HOLDING

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PLAYTIKA HOLDING DL 01 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PLAYTIKA HOLDING reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EHEALTH and PLAYTIKA HOLDING

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