Correlation Between Playtika Holding and Ark Restaurants

Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Ark Restaurants 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 Ark Restaurants 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 Ark Restaurants Corp, you can compare the effects of market volatilities on Playtika Holding and Ark Restaurants 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 Ark Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Ark Restaurants.

Diversification Opportunities for Playtika Holding and Ark Restaurants

0.31

Correlation Coefficient

Playtika Holding  Ark Restaurants

Weak diversification

The 3 months correlation between Playtika and Ark is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Ark Restaurants Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ark Restaurants Corp 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 Ark Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ark Restaurants Corp has no effect on the direction of Playtika Holding i.e., Playtika Holding and Ark Restaurants go up and down completely randomly.

Pair Corralation between Playtika Holding and Ark Restaurants

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the Ark Restaurants. In addition to that, Playtika Holding is 1.57 times more volatile than Ark Restaurants Corp. It trades about -0.42 of its total potential returns per unit of risk. Ark Restaurants Corp is currently generating about -0.4 per unit of volatility. If you would invest  1,269  in Ark Restaurants Corp on December 10, 2024 and sell it today you would lose (258.00) from holding Ark Restaurants Corp or give up 20.33% of portfolio value over 90 days.

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

Playtika Holding Corp  vs.  Ark Restaurants Corp

Playtika Holding Corp

Risk-Adjusted Performance

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 inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Ark Restaurants Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ark Restaurants Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Playtika Holding and Ark Restaurants

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

The idea behind Playtika Holding Corp and Ark Restaurants 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.