Correlation Between Playtika Holding and Gatos Silver

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

Diversification Opportunities for Playtika Holding and Gatos Silver

0.28

Correlation Coefficient

Playtika Holding  Gatos Silver

Modest diversification

The 3 months correlation between Playtika and Gatos is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Gatos Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatos Silver 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 Gatos Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatos Silver has no effect on the direction of Playtika Holding i.e., Playtika Holding and Gatos Silver go up and down completely randomly.

Pair Corralation between Playtika Holding and Gatos Silver

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the Gatos Silver. But the stock apears to be less risky and, when comparing its historical volatility, Playtika Holding Corp is 1.68 times less risky than Gatos Silver. The stock trades about -0.24 of its potential returns per unit of risk. The Gatos Silver is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  1,551  in Gatos Silver on October 11, 2024 and sell it today you would lose (55.00) from holding Gatos Silver or give up 3.55% of portfolio value over 90 days.

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

Playtika Holding Corp  vs.  Gatos Silver

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.

Gatos Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gatos Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Gatos Silver is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Playtika Holding and Gatos Silver

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

The idea behind Playtika Holding Corp and Gatos Silver 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.