Correlation Between Playtika Holding and Eurobank Ergasias

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

Diversification Opportunities for Playtika Holding and Eurobank Ergasias

-0.31

Correlation Coefficient

Playtika Holding  Eurobank Ergasias

Very good diversification

The 3 months correlation between Playtika and Eurobank is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Eurobank Ergasias Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurobank Ergasias 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 Eurobank Ergasias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eurobank Ergasias has no effect on the direction of Playtika Holding i.e., Playtika Holding and Eurobank Ergasias go up and down completely randomly.

Pair Corralation between Playtika Holding and Eurobank Ergasias

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the Eurobank Ergasias. In addition to that, Playtika Holding is 1.15 times more volatile than Eurobank Ergasias Services. It trades about -0.36 of its total potential returns per unit of risk. Eurobank Ergasias Services is currently generating about 0.32 per unit of volatility. If you would invest  209.00  in Eurobank Ergasias Services on October 11, 2024 and sell it today you would earn a total of  29.00  from holding Eurobank Ergasias Services or generate 13.88% return on investment over 90 days.

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

Playtika Holding Corp  vs.  Eurobank Ergasias Services

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.

Eurobank Ergasias

Risk-Adjusted Performance

10 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eurobank Ergasias Services are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting technical and fundamental indicators, Eurobank Ergasias may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Playtika Holding and Eurobank Ergasias

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

The idea behind Playtika Holding Corp and Eurobank Ergasias Services 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 Valuation module to check real value of public entities based on technical and fundamental data.