Correlation Between Margo Caribe and Playtika Holding

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

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

Diversification Opportunities for Margo Caribe and Playtika Holding

0.13

Correlation Coefficient

Margo Caribe  Playtika Holding

Average diversification

The 3 months correlation between Margo and Playtika is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Margo Caribe 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 Margo Caribe 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 Margo Caribe 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 Margo Caribe i.e., Margo Caribe and Playtika Holding go up and down completely randomly.

Pair Corralation between Margo Caribe and Playtika Holding

Given the investment horizon of 90 days Margo Caribe is expected to generate 30.68 times more return on investment than Playtika Holding. However, Margo Caribe is 30.68 times more volatile than Playtika Holding Corp. It trades about 0.1 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about -0.19 per unit of risk. If you would invest  800.00  in Margo Caribe on October 7, 2024 and sell it today you would lose (335.00) from holding Margo Caribe or give up 41.87% of portfolio value over 90 days.

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

Margo Caribe  vs.  Playtika Holding Corp

Margo Caribe

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Margo Caribe are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Margo Caribe displayed solid returns over the last few months and may actually be approaching a breakup point.

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 Margo Caribe and Playtika Holding

The main advantage of trading using opposite Margo Caribe and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Margo Caribe 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 Margo Caribe 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..