Correlation Between Playtika Holding and Coupang LLC

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

Diversification Opportunities for Playtika Holding and Coupang LLC

0.13

Correlation Coefficient

Playtika Holding  Coupang LLC

Average diversification

The 3 months correlation between Playtika and Coupang is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Coupang LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coupang LLC 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 Coupang LLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coupang LLC has no effect on the direction of Playtika Holding i.e., Playtika Holding and Coupang LLC go up and down completely randomly.

Pair Corralation between Playtika Holding and Coupang LLC

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the Coupang LLC. In addition to that, Playtika Holding is 1.36 times more volatile than Coupang LLC. It trades about -0.5 of its total potential returns per unit of risk. Coupang LLC is currently generating about -0.27 per unit of volatility. If you would invest  2,500  in Coupang LLC on September 26, 2024 and sell it today you would lose (220.00) from holding Coupang LLC or give up 8.8% of portfolio value over 90 days.

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

Playtika Holding Corp  vs.  Coupang LLC

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 uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Coupang LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coupang LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Playtika Holding and Coupang LLC

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

The idea behind Playtika Holding Corp and Coupang LLC 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.