Correlation Between Playtika Holding and Bridgetown Holdings

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

Diversification Opportunities for Playtika Holding and Bridgetown Holdings

0.01

Correlation Coefficient

Playtika Holding  Bridgetown Holdings

Significant diversification

The 3 months correlation between Playtika and Bridgetown is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Bridgetown Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgetown Holdings 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 Bridgetown Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgetown Holdings has no effect on the direction of Playtika Holding i.e., Playtika Holding and Bridgetown Holdings go up and down completely randomly.

Pair Corralation between Playtika Holding and Bridgetown Holdings

Given the investment horizon of 90 days Playtika Holding is expected to generate 178.22 times less return on investment than Bridgetown Holdings. But when comparing it to its historical volatility, Playtika Holding Corp is 5.45 times less risky than Bridgetown Holdings. It trades about 0.0 of its potential returns per unit of risk. Bridgetown Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  10.00  in Bridgetown Holdings on September 19, 2024 and sell it today you would earn a total of  11.00  from holding Bridgetown Holdings or generate 110.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	28.43%
Values	Daily Returns

Playtika Holding Corp  vs.  Bridgetown Holdings

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.

Bridgetown Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bridgetown Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Bridgetown Holdings is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Playtika Holding and Bridgetown Holdings

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

The idea behind Playtika Holding Corp and Bridgetown Holdings 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..