Correlation Between Playtika Holding and BKV

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

Diversification Opportunities for Playtika Holding and BKV

-0.17

Correlation Coefficient

Playtika Holding  BKV

Good diversification

The 3 months correlation between Playtika and BKV is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and BKV Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKV Corporation 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 BKV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKV Corporation has no effect on the direction of Playtika Holding i.e., Playtika Holding and BKV go up and down completely randomly.

Pair Corralation between Playtika Holding and BKV

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the BKV. In addition to that, Playtika Holding is 1.06 times more volatile than BKV Corporation. It trades about -0.43 of its total potential returns per unit of risk. BKV Corporation is currently generating about 0.22 per unit of volatility. If you would invest  2,158  in BKV Corporation on October 8, 2024 and sell it today you would earn a total of  210.00  from holding BKV Corporation or generate 9.73% return on investment over 90 days.

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

Playtika Holding Corp  vs.  BKV Corp.

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.

BKV Corporation

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BKV Corporation are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile forward-looking signals, BKV showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Playtika Holding and BKV

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

The idea behind Playtika Holding Corp and BKV Corporation 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.