Correlation Between Playtika Holding and GD Culture

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

Diversification Opportunities for Playtika Holding and GD Culture

0.44

Correlation Coefficient

Playtika Holding  GD Culture

Very weak diversification

The 3 months correlation between Playtika and GDC is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and GD Culture Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GD Culture Group 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 GD Culture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GD Culture Group has no effect on the direction of Playtika Holding i.e., Playtika Holding and GD Culture go up and down completely randomly.

Pair Corralation between Playtika Holding and GD Culture

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the GD Culture. But the stock apears to be less risky and, when comparing its historical volatility, Playtika Holding Corp is 2.46 times less risky than GD Culture. The stock trades about -0.25 of its potential returns per unit of risk. The GD Culture Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  223.00  in GD Culture Group on December 1, 2024 and sell it today you would lose (31.00) from holding GD Culture Group or give up 13.9% of portfolio value over 90 days.

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

Playtika Holding Corp  vs.  GD Culture Group

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.

GD Culture Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days GD Culture Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, GD Culture is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Playtika Holding and GD Culture

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

The idea behind Playtika Holding Corp and GD Culture Group 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.