Correlation Between Playtika Holding and Inception Growth

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

Diversification Opportunities for Playtika Holding and Inception Growth

-0.41

Correlation Coefficient

Playtika Holding  Inception Growth

Very good diversification

The 3 months correlation between Playtika and Inception is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Inception Growth Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inception Growth Acq 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 Inception Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inception Growth Acq has no effect on the direction of Playtika Holding i.e., Playtika Holding and Inception Growth go up and down completely randomly.

Pair Corralation between Playtika Holding and Inception Growth

Given the investment horizon of 90 days Playtika Holding is expected to generate 6.29 times less return on investment than Inception Growth. In addition to that, Playtika Holding is 1.33 times more volatile than Inception Growth Acquisition. It trades about 0.01 of its total potential returns per unit of risk. Inception Growth Acquisition is currently generating about 0.04 per unit of volatility. If you would invest  1,074  in Inception Growth Acquisition on October 9, 2024 and sell it today you would earn a total of  165.00  from holding Inception Growth Acquisition or generate 15.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.98%
Values	Daily Returns

Playtika Holding Corp  vs.  Inception Growth Acquisition

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 quite persistent basic indicators, Playtika Holding is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Inception Growth Acq

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Inception Growth Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively weak basic indicators, Inception Growth may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Playtika Holding and Inception Growth

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

The idea behind Playtika Holding Corp and Inception Growth Acquisition 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.