Correlation Between Playtika Holding and HE Equipment

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

Diversification Opportunities for Playtika Holding and HE Equipment

0.73

Correlation Coefficient

Playtika Holding  HE Equipment

Poor diversification

The 3 months correlation between Playtika and HEES is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and HE Equipment Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HE Equipment Services 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 HE Equipment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HE Equipment Services has no effect on the direction of Playtika Holding i.e., Playtika Holding and HE Equipment go up and down completely randomly.

Pair Corralation between Playtika Holding and HE Equipment

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the HE Equipment. In addition to that, Playtika Holding is 1.07 times more volatile than HE Equipment Services. It trades about -0.51 of its total potential returns per unit of risk. HE Equipment Services is currently generating about -0.51 per unit of volatility. If you would invest  6,051  in HE Equipment Services on September 24, 2024 and sell it today you would lose (1,172) from holding HE Equipment Services or give up 19.37% of portfolio value over 90 days.

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

Playtika Holding Corp  vs.  HE Equipment 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.

HE Equipment Services

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HE Equipment Services are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, HE Equipment is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Playtika Holding and HE Equipment

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

The idea behind Playtika Holding Corp and HE Equipment 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.