Correlation Between Playtika Holding and BW Offshore

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

Diversification Opportunities for Playtika Holding and BW Offshore

0.33

Correlation Coefficient

Playtika Holding  BW Offshore

Weak diversification

The 3 months correlation between Playtika and BWOFY is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and BW Offshore Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore Limited 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 BW Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW Offshore Limited has no effect on the direction of Playtika Holding i.e., Playtika Holding and BW Offshore go up and down completely randomly.

Pair Corralation between Playtika Holding and BW Offshore

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the BW Offshore. In addition to that, Playtika Holding is 4.13 times more volatile than BW Offshore Limited. It trades about -0.48 of its total potential returns per unit of risk. BW Offshore Limited is currently generating about 0.29 per unit of volatility. If you would invest  538.00  in BW Offshore Limited on September 23, 2024 and sell it today you would earn a total of  17.00  from holding BW Offshore Limited or generate 3.16% 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.  BW Offshore Limited

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.

BW Offshore Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BW Offshore Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, BW Offshore 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 BW Offshore

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

The idea behind Playtika Holding Corp and BW Offshore Limited 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.