Correlation Between Playtika Holding and COVER

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

Diversification Opportunities for Playtika Holding and COVER

0.09

Correlation Coefficient

Playtika Holding  COVER

Significant diversification

The 3 months correlation between Playtika and COVER is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and COVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COVER 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 COVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COVER has no effect on the direction of Playtika Holding i.e., Playtika Holding and COVER go up and down completely randomly.

Pair Corralation between Playtika Holding and COVER

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the COVER. But the stock apears to be less risky and, when comparing its historical volatility, Playtika Holding Corp is 1.43 times less risky than COVER. The stock trades about -0.25 of its potential returns per unit of risk. The COVER is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,550  in COVER on December 1, 2024 and sell it today you would earn a total of  45.00  from holding COVER or generate 2.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Playtika Holding Corp  vs.  COVER

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.

COVER

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in COVER are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, COVER may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Playtika Holding and COVER

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

The idea behind Playtika Holding Corp and COVER 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..