Correlation Between Playtika Holding and Aquestive Therapeutics

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

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

Diversification Opportunities for Playtika Holding and Aquestive Therapeutics

0.37

Correlation Coefficient

Playtika Holding  Aquestive Therapeutics

Weak diversification

The 3 months correlation between Playtika and Aquestive is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Aquestive Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquestive Therapeutics and Playtika Holding 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 Playtika Holding Corp are associated (or correlated) with Aquestive Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquestive Therapeutics has no effect on the direction of Playtika Holding i.e., Playtika Holding and Aquestive Therapeutics go up and down completely randomly.

Pair Corralation between Playtika Holding and Aquestive Therapeutics

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the Aquestive Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Playtika Holding Corp is 2.04 times less risky than Aquestive Therapeutics. The stock trades about -0.01 of its potential returns per unit of risk. The Aquestive Therapeutics is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  99.00  in Aquestive Therapeutics on October 4, 2024 and sell it today you would earn a total of  257.00  from holding Aquestive Therapeutics or generate 259.6% return on investment over 90 days.

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

Playtika Holding Corp  vs.  Aquestive Therapeutics

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.

Aquestive Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aquestive Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Playtika Holding and Aquestive Therapeutics

The main advantage of trading using opposite Playtika Holding and Aquestive Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Aquestive Therapeutics 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 Aquestive Therapeutics will offset losses from the drop in Aquestive Therapeutics' long position.

The idea behind Playtika Holding Corp and Aquestive Therapeutics 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.