Correlation Between Playtika Holding and BioNTech

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

Diversification Opportunities for Playtika Holding and BioNTech

-0.16

Correlation Coefficient

Playtika Holding  BioNTech

Good diversification

The 3 months correlation between Playtika and BioNTech is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE 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 BioNTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioNTech SE has no effect on the direction of Playtika Holding i.e., Playtika Holding and BioNTech go up and down completely randomly.

Pair Corralation between Playtika Holding and BioNTech

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the BioNTech. In addition to that, Playtika Holding is 1.07 times more volatile than BioNTech SE. It trades about -0.4 of its total potential returns per unit of risk. BioNTech SE is currently generating about 0.0 per unit of volatility. If you would invest  12,082  in BioNTech SE on October 9, 2024 and sell it today you would lose (61.00) from holding BioNTech SE or give up 0.5% of portfolio value over 90 days.

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

Playtika Holding Corp  vs.  BioNTech SE

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 quite persistent basic indicators, Playtika Holding is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

BioNTech SE

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, BioNTech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Playtika Holding and BioNTech

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

The idea behind Playtika Holding Corp and BioNTech SE 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.

Check out your portfolio center.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.